CSR Remanufacturing Supply Chains under WTP Differentiation

Abstract

With the shortage of global resources and the call for sustainable development, the remanufacturing supply chain and the corporate social responsibility of enterprises have attracted extensive attention from scholars. This paper studies a manufacturer-retailer corporate social responsibility (CSR) remanufacturing supply chain in which the manufacturer collects the used products grounded in the willingness to pay (WTP) differentiation. Different from previous literature, this paper first adds WTP differences to the CSR remanufacturing supply chain. Next, we analyze the manufacturer exhibiting CSR activity by Stackelberg game theory in both centralized and decentralized models with a consideration of prices, recycling, consumer surplus, and profits for the chain players in the two models with different CSR ratios. Through calculation and analyses of the models, we note that the chain members have the best status when the consumers’ WTP for new and remanufactured products is within a threshold. Subsequently, we compare the optimal price decisions and the expected profits in the decentralized and centralized systems, and we find that the retail price, wholesale price, and recycling rate decrease with a rising CSR under WTP differentiation. The centralized retail price is lower than the decentralized one. Conversely, the profit is higher when the increment of demand is higher. On top of that, in common cases, the pure and total profits of manufacturing are ascending while the retailer’s profit is descending. We also find that the consumer surplus is increasing in two cases. Finally, to motivate the players in the supply chain to engage in CSR activity, we consider the revenue sharing contract. From the perspective of WTP differences, this paper studies CSR remanufacturing, which has certain influences on the sustainable development of the economy.

Consumers' willingness to pay for corporate social responsibility: Theory and evidence

“…(Al Jarah & Emeagwali, 2017;Alfnes, 2017;Alniacik et al, 2011;Amezcua et al, 2018;Barboza, 2019;Becchetti et al, 2020;Boccia et al, 2018;Boccia & Sarnacchiaro, 2020;Boccia & Sarno, 2019;Bulte et al, 2005;Castillo-Villar & Cavazos-Arroyo, 2020;Chen et al, 2016;Civero et al, 2017;Costanigro et al, 2016;Dai et al, 2020;Daudigeos & Valiorgue, 2011;De Magistris et al, 2015;Del Giudice et al, 2018;Diallo et al, 2021;Dutta & Singh, 2013;Ferreira & Ribeiro, 2016;Gao et al, 2016;Gupta, 2015;Habel et al, 2016;…”

Retailer or the third-party remanufacturer: Which is the greener contractor for outsourcing remanufacturing?

“…If the seller informs the consumer that by purchasing a remanufactured product, the consumer can make a positive contribution to the environment, consumers' willingness to pay increases. Dai et al (2020) pay is within reasonable limits and there is no surplus or shortage, which helps to sustain the development of the economy. The perceived value of remanufactured products to consumers is very important, as high consumers' willingness to pay can be detrimental to producers (Fang et al, 2019).…”

Operation decision of competitive mining supply chain based on social responsibility

“…The paper studied the social problems in the supply chain through case studies and discussed in detail how managers can work actively to reduce social risks, create new opportunities, and improve company performance [ 27 ]. In the remanufacturing supply chain, considering the differences of corporate social responsibility and consumers’ payment for new products and remanufactured products, discusses their impact on the decisions and profits of the remanufacturing supply chain members [ 28 , 29 ]. The sharing mechanism of social responsibility investment can also improve the performance of the supply chain [ 30 , 31 ].…”