Production and pricing decisions in a dual-channel supply chain under remanufacturing subsidy policy and carbon tax policy

Cao, Kaiying; He, Ping; Liu, Zhixin

doi:10.1080/01605682.2019.1605471

Cited by 127 publications

(78 citation statements)

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“…Guo et al [44] pointed out that governments should adopt an appropriate subsidy policy to encourage the recovery of returned items. Cao et al [45] compared Remanufacturing Subsidy Policy (RSP) with Carbon Tax Policy (CTP) to examine which policy is better for society, and found that if the environmental damage coefficient is relatively small, the government should implement the RSP to gain greater social welfare.…”

Section: Government Policy Of Closed-loop Supply Chainsmentioning

confidence: 99%

Optimal Pricing Strategy and Government Consumption Subsidy Policy in Closed-Loop Supply Chain with Third-Party Remanufacturer

et al. 2020

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Due to the increasing awareness of sustainable manufacturing, remanufacturing has been widely accepted by enterprises in many countries. In the process of Closed-Loop Supply Chain (CLSC) development, to stimulate the demand for remanufactured products, the Chinese government’s interventions such as the “Trade old for Remanufactured” program cannot be ignored. However, prior research has not answered the questions of whether governments should offer consumption subsidies and how to determine the optimal subsidy value. This paper investigates the optimal government consumption subsidy policy and its impact on the operation of Closed-Loop Supply Chain (CLSC) where an Original Equipment Manufacturer (OEM) produces new products, while a Third-Party Remanufacturer (TPR) remanufactures the used products collected from consumers. A game model with a leader (government) and two followers (OEM and TPR) is then introduced. The government determines the consumption subsidy to maximize the social welfare, while the TPR and OEM attempt to maximize their own profit functions. Game theoretic models are proposed to explore and compare the scenarios, i.e., CLSC with a consumption subsidy policy and without a consumption subsidy policy. The equilibrium characteristics with respect to the government’s consumption subsidy decisions and the price decisions for chain members are derived. Based on the theoretical and numerical analysis, the results show that: (1) governments should not always offer a consumption subsidy; (2) the consumption subsidy cannibalizes demand for new products while boosting the demand for remanufactured products; (3) the consumption subsidy should be shared between the TPR and consumers when the TPR raises the sales price of remanufactured product; (4) the members of the CLSC do not always benefit from the consumption subsidy policy.

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Section: Government Policy Of Closed-loop Supply Chainsmentioning

confidence: 99%

Optimal Pricing Strategy and Government Consumption Subsidy Policy in Closed-Loop Supply Chain with Third-Party Remanufacturer

et al. 2020

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“…Some scholars discussed the optimal production decisions on manufacturing and remanufacturing under carbon tax policy. Combing with government subsidy policy, Cao et al [37] studied the optimal production and pricing decisions in a dual-channel supply chain. Cao et al [38] further investigated the optimal warranty period and trade-in strategies for new and remanufactured products by considering the trade-in subsidies policy.…”

Section: Complexitymentioning

confidence: 99%

Optimal Operational Decision Making of Manufacturers and Authorized Remanufacturers with Patent Licensing under Carbon Cap-and-Trade Regulations

et al. 2020

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Constrained by production capacity and the pressure to reduce emissions, many original equipment manufacturers (OEMs) authorize third-party remanufacturers (TPRs) to remanufacture patented products. We investigate the operational decisions of OEMs and authorized TPRs under carbon cap-and-trade regulations in a two-echelon supply chain. We first formulate an operational decision model for OEMs before a TPR enters. Then, for the cases of centralized and decentralized decision making, we formulate an operational decision-making model for the TPR and, subsequently, establish one for the OEM after the TPR enters. We further analyze the effects of carbon emissions cap, trading price of carbon permits, yield rate, and consumer willingness to pay (WTP) on optimal decisions. Our results indicate: whether TPRs accept authorization remanufacturing depending on the ratio of carbon emissions cap to carbon emissions for producing per remanufactured product; royalty rate is negatively affected by trading price of carbon permits and per remanufactured product’ carbon emissions other than that for per new product, and can offset the threat caused by TPRs; the implementation of carbon cap-and-trade regulations causes OEMs to charge TPRs lower royalty rate; centralized decision making increases the total profit of the supply chain and delivers superior environmental benefits. As yield rate and WTP increase, the total profit increases, increasingly sensitive to WTP.

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“…Moreover, given the firm's need to undertake operational costs from the offline store, we assume that the unit operational cost of the offline store is c s [17]. Moreover, the government taxes the firm per unit carbon emission with carbon tax price t [24,25]. The unit carbon emission of the new product is e n [26], and the unit carbon emission of the remanufactured product is assumed by βe n , where β is the remanufactured product's emission intensity [24].…”

Section: Notation Description P Simentioning

confidence: 99%

“…Moreover, the government taxes the firm per unit carbon emission with carbon tax price t [24,25]. The unit carbon emission of the new product is e n [26], and the unit carbon emission of the remanufactured product is assumed by βe n , where β is the remanufactured product's emission intensity [24]. To simplify our model, similar to Yenipazarli [20], we assume that the unit carbon emission of the new product is equal to 1 (i.e., e n = 1).…”

Section: Notation Description P Simentioning

confidence: 99%

Optimal Channel Choice of Firms with New and Remanufactured Products in the Contexts of E-Commerce and Carbon Tax Policy

Cao

Wang

2019

Sustainability

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: This paper is motivated by the dilemma faced by firms who sell new and remanufactured products offline that need to consider whether to enter e-commerce platforms considering that more and more consumers are shopping online on e-commerce platforms rather than shopping offline. Our paper aims to help firms with new and remanufactured products make a channel choice and determine product pricing strategies in the contexts of e-commerce and carbon tax policy. Our paper uses optimization theory, game theory, utility functions and profit-maximization models to investigate the optimal channel choice of whether a firm should enter an e-commerce platform; it also investigates the optimal prices of new and remanufactured products and referral fees in two cases—the firm does not enter the platform (N) and the firm enters the platform (Y). Some insights are presented as follows: We found that the firm should enter the platform if the annual service fee is relatively low, otherwise, the firm should not enter the platform. Interestingly, in the case of a firm with an offline store with relatively large operational costs or hassle costs, the firm is more reluctant to enter the platform. In the extension, we considered some consumers who only purchase offline products, and found that the firm considering these consumers is more likely to choose not to enter the platform. Moreover, we argue that the carbon tax policy has a positive effect on product prices but a negative effect on referral fees charged by the platform, and the choice of Y hurts the environment due to a relatively high total carbon emission.

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Production and pricing decisions in a dual-channel supply chain under remanufacturing subsidy policy and carbon tax policy

Cited by 127 publications

References 50 publications

Optimal Pricing Strategy and Government Consumption Subsidy Policy in Closed-Loop Supply Chain with Third-Party Remanufacturer

Optimal Pricing Strategy and Government Consumption Subsidy Policy in Closed-Loop Supply Chain with Third-Party Remanufacturer

Optimal Operational Decision Making of Manufacturers and Authorized Remanufacturers with Patent Licensing under Carbon Cap-and-Trade Regulations

Optimal Channel Choice of Firms with New and Remanufactured Products in the Contexts of E-Commerce and Carbon Tax Policy

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