Research on Product Upgrading Strategy in Remanufacturing Environment
Abstract
Under the manufacturers and outsourcing authorizing remanufacturing, the production decisions considering the optimal production decision is made under a two-stage game model in which the manufacturer engages in both new product production and discarded product remanufacturing. The competitive and cooperative relationship between manufacturer and who then charge a certain remanufacturing licensing fee to third party remanufacturers is analyzed, and the differences between models M and O in terms of optimal production quantity of new/remanufactured products, economic performance, environmental sustainability and product upgrading incentives are compared. We find that manufacturer are more likely to upgrade products when the remanufacturing is outsourced to a third party remanufacturer. When the remanufacturing business is outsourced, the third party remanufacturer always reduces the profitability of the original product manufacturer, but it is beneficial to the environment.
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DOI: http://dx.doi.org/10.18686/mmf.v6i9.9966
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