Demand signal transmission in a certified refurbishing supply chain: rules and incentive analysis

Baozhuang Niu (), Lei Chen (), Zongbao Zou () and Ping Ji ()
Additional contact information
Baozhuang Niu: South China University of Technology
Lei Chen: South China University of Technology
Zongbao Zou: Shantou University
Ping Ji: The Hong Kong Polytechnic University

Annals of Operations Research, 2023, vol. 329, issue 1, No 1, 46 pages

Abstract: Abstract Retailers, who sell certified refurbished products, usually have accumulated big data on demand properties, and hence, hold demand signal advantages over the other supply chain parties. In practice, we observe that this signal might be voluntarily shared to a rival who sells regular products. We are therefore interested in the incentives of demand signal transmission of the retailer selling certified refurbished products, and the value of an accurate signal for the other supply chain parties, especially in a one-to-two supply chain comprising a manufacturer (producing both regular and certified refurbished products) and two retailers (selling regular and certified refurbished products, respectively). We formulate the two retailers’ competition and demand signal properties, and find that it is of the best interest for the manufacturer to produce two products, regardless of the possible downstream competition. We derive interesting demand signal transmission rules that the retailer selling certified refurbished products would voluntarily transmit the signal to the retailer (the rival) selling regular products, while it will not transmit the signal to the upstream manufacturer (the business partner). Even if the retailer selling regular products obtains the signal, it will not transmit the signal to the manufacturer either. We discuss the resulting insights regarding the production cost reduction, the government subsidy, and the product quality improvement. We find that the signal transmission rule is robust, and the retailers’ profits may be reduced by the quality improvement of the certified refurbished product.

Keywords: Manufacturing systems; Certified refurbishing; Demand signal update; Supply chain collaboration (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://link.springer.com/10.1007/s10479-019-03397-7 Abstract (text/html)
Access to the full text of the articles in this series is restricted.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:spr:annopr:v:329:y:2023:i:1:d:10.1007_s10479-019-03397-7

Ordering information: This journal article can be ordered from
http://www.springer.com/journal/10479

DOI: 10.1007/s10479-019-03397-7

Access Statistics for this article

Annals of Operations Research is currently edited by Endre Boros

More articles in Annals of Operations Research from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().