Optimal remanufacturing strategies in name-your-own-price auctions with limited capacity

Qifei Wang, Jianbin Li, Hong Yan and Stuart X. Zhu

International Journal of Production Economics, 2016, vol. 181, issue PA, 113-129

Abstract: We study optimal pricing and production strategies faced by a manufacturer in a remanufacturing/manufacturing system. In the reverse channel, returns are collected under a name-your-own-price (NYOP) bidding mechanism. The manufacturer has a limited capacity to produce new and remanufactured products. We characterize the optimal decisions of the consumers and the manufacturer. We find that under the NYOP mechanism, the manufacturer׳s optimal strategies mainly depend on the bidding cost, the cost saving of remanufacturing, the production capacity, and the market scale. In addition, when remanufacturing needs more capacity than manufacturing , the manufacturer may adopt pure manufacturing strategy without remanufacturing. We also compare this mechanism with the traditional list-price mechanism and find that the manufacturer prefers the NYOP mechanism under the conditions of a low reverse market share, a high manufacturing cost, a sufficient capacity, or a low capacity requirement of remanufacturing. Numerical studies investigate the effect of key parameters on the manufacturer׳s profit and some managerial insights are obtained.

Keywords: Remanufacturing; Name-your-own-price; List price; Capacity constraint (search for similar items in EconPapers)
Date: 2016
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:proeco:v:181:y:2016:i:pa:p:113-129

DOI: 10.1016/j.ijpe.2016.01.008

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