Optimal pricing decisions under the coexistence of “trade old for new” and “trade old for remanufactured” programs

Zu-Jun Ma, Qin Zhou, Ying Dai and Jiuh-Biing Sheu

Transportation Research Part E: Logistics and Transportation Review, 2017, vol. 106, issue C, 337-352

Abstract: Under the coexistence of “trade old for new” (TON) and “trade old for remanufactured” (TOR) programs, we study a firm’s optimal pricing decisions and identify the thresholds that determine whether the firm should offer TON and TOR simultaneously. The result shows that adopting two kinds of trade-ins simultaneously does not necessarily benefit the firm and that the firm should use different trade-in schemes under different conditions. Moreover, we extend the model to the case with budget constraints on the TOR subsidy. The result shows that the firm’s profit decreases when the actual TOR quantity exceeds the upper limit.

Keywords: Pricing decision; Trade-in; Trade old for new; Trade old for remanufactured; Budget constraints; Subsidy (search for similar items in EconPapers)
Date: 2017
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Citations: View citations in EconPapers (14)

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DOI: 10.1016/j.tre.2017.08.012

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