Production and pricing decisions for new and remanufactured products with customer prejudice and accurate response

摘要

As remanufacturing may reduce production costs and energy consumption, an increasing number of companies are devoting attention to remanufacturing. This study investigates the impact of the remanufacturing strategy on the manufacturer, considering customer prejudice and accurate response. We characterize the optimal produc-tion and pricing decisions for new and remanufactured products in a two-stage model with and without rema-nufacturing. For new products, the manufacturer may make a speculative production before knowing the demand (which is defined as Situation A) and both speculative and reactive production before and after knowing the demand (which is defined as Situation B). Remanufactured products can be produced reactively after determining the demand, and remanufacturing can thus be considered a form of accurate response. Due to customer prejudice against remanufactured products, the manufacturer may not benefit from remanufacturing. In Situations A and B, the condition by which the manufacturer will participate in remanufacturing is presented. The results indicate that the government faces a greater challenge in enticing the manufacturer in Situation B to be involved in the remanufacturing strategy than that in Situation A. Finally, numerical experiments are per-formed to investigate the impact of the cost and demand parameters on the benefits of remanufacturing.