Investigating remanufacturing competition with yield uncertainty on market share, profit, and consumer surplus

Abstract

Remanufacturing has been recognized both in literature and practice because of its greenness and cost saving. Since the reproduction processes could be affected by uncertain factors, remanufacturing is much more complex than producing new products. To investigate how yield uncertainty and market competition affect remanufacturing decisions, we compare the results under three classical market scenarios with random yield, that is, (a) Nash-Cournot, (b) monopoly, and (c) Stackelberg-Cournot. On comparing the expected remanufacturing scale, expected profit, and consumer surplus, it shows that as the number of remanufacturers increases, the planned collection quantity of a single remanufacturer decreases, while the total expected market output increases. Furthermore, we find that the largest expected profit and expected consumer surplus brought by market scenarios depend on a threshold remanufacturer number. We also relax the assumptions and extend our model to consider the scenario of m leaders and n − m followers in a Stackelberg game. It is interesting to find that the first-mover advantage in profit and market share of the leader remanufacturer would be challenged when the number of leader remanufacturers is no less than 2. The results can be potentially useful for managerial decisions and environmental administrations.

Managing disruption risk in competing multitier supply chains

“…Besides, the two manufacturers produce substitutable products for the end market. Following the existing literature (Wadecki et al., 2012; Fang and Shou, 2015; Shen et al., 2020; Zhu et al., 2020; Ziari et al., 2022), we suppose that the two manufacturers are engaged in Cournot competition, wherein the market‐clearing prices satisfy $$p_{i}(Q_{i},Q_{j})=\psi -\zeta _{i}Q_{i}-\gamma \zeta _{j}Q_{j}$$. Here, the indexes $$i,j$$ are in $$\lbrace 1,2\rbrace$$ and $$i\ne j$$; $$\psi >0$$ measures the market potential; $$\gamma \in [0,1]$$ measures the competition intensity; and $$Q_{i}$$ represents the order quantity of manufacturer $$M_{i}$$.…”

An investigation of original equipment manufacturer's optimal remanufacturing mode and engagement strategy

“…Zhu et al. (2019) investigated how remanufacturing decisions are affected by different market conditions. Ma et al.…”

The prices and quality of new and remanufactured products in a new market segment

“…Zhu et al. (2020) research the remanufacturing decisions under three market cases considering yield uncertainty. Huang et al.…”

“…Given product quality s , the variable cost for producing unit new product is , where c is a scaling parameter (Moorthy, 1988; Atasu and Souza, 2013). The cost of remanufacturing a product is less than the cost of manufacturing a corresponding new product of the same quality due to some parts being reused (Jin et al., 2016; Kovach et al., 2018; Ma et al., 2019; Zhu et al., 2020). Similar to Ferrer and Swaminathan (2006) and Örsdemir et al.…”