Cost information sharing under competition in remanufacturing
He Huang,
Qiuling Meng,
Hongyan Xu and
Yu Zhou
International Journal of Production Research, 2019, vol. 57, issue 21, 6579-6592
Abstract:
Third-party remanufacturers (TPRs) enter the market and compete with original equipment manufacturers (OEMs). Because of multiple uncertainty of the remanufacturing process, the variable remanufacturing cost is random and its true value cannot be observed by OEMs. In this paper, we consider the competition between one TPR and one OEM, and then investigate incentives of cost information sharing. The remanufactured product quantity is constrained by the new product quantity. If the new production cost is low enough such that the optimal remanufactured product quantity is less than the optimal new product quantity, the TPR should always share cost information with the OEM so that their quantity decisions in equilibrium are more responsive to market conditions to avoid overproduction or underproduction. However, if the quantity constraint is binding, the TPR should not always share cost information; in this case, cost information sharing can allow the OEM to adjust the new product quantity to limit remanufacturing and hence be detrimental to the TPR. When the TPR does not voluntarily share cost information, we further examine the impacts of private information on the society and the environment, and then suggest the government to promote information sharing and subsidise the TPR under certain conditions.
Date: 2019
References: Add references at CitEc
Citations: View citations in EconPapers (19)
Downloads: (external link)
http://hdl.handle.net/10.1080/00207543.2019.1567952 (text/html)
Access to full text is restricted to subscribers.
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:taf:tprsxx:v:57:y:2019:i:21:p:6579-6592
Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/TPRS20
DOI: 10.1080/00207543.2019.1567952
Access Statistics for this article
International Journal of Production Research is currently edited by Professor A. Dolgui
More articles in International Journal of Production Research from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().