Remanufacturing Strategy under Cap-and-Trade Regulation in the Presence of Assimilation Effect

Guo, Tianyi; Li, Chaonan; Chen, Yan

doi:10.3390/su14052878

Cited by 5 publications

(8 citation statements)

References 35 publications

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“…They found that the improvement of consumers' perceived value for new products can increase the market demand and profit of OEM, but it can damage the market demand and profit of third-party recyclers. Guo et al [25] studied a monopolist manufacturer's optimal remanufacturing and pricing strategies under the cap-and-trade regulation with the impact of assimilation effect and they found that the assimilation effect can reduce the manufacturer's motivation to engage in remanufacturing. Huang et al [26] assumed that the entry of independent remanufacturers can increase consumers' perceived value for new products and investigated the optimal pricing decisions of CLSC members.…”

Section: Contrast/assimilation Effect In Clscsmentioning

confidence: 99%

Authorization or Outsourcing: Considering the Contrast/Assimilation Effect and Network Externality of Remanufactured Products under Government Subsidy

Hu,

Meng,

Xue

et al. 2023

Sustainability

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This paper examines the impact of the contrast/assimilation effect and network externality of remanufactured products on remanufacturing mode selection for original equipment manufacturers (OEMs) under government subsidy. We develop a two-period Stackelberg game model in a closed-loop supply chain (CLSC) composed of an OEM and a third-party remanufacturer (TPR) considering two remanufacturing modes: authorization remanufacturing mode and outsourcing remanufacturing mode. The results show the following: (1) The OEM prefers to select authorization when the contrast/assimilation effect and government subsidy level are both relatively low; otherwise, the OEM prefers outsourcing. The TPR always prefers the outsourcing mode. Therefore, a win–win situation between the OEM and the TPR could be achieved through OEM outsourcing remanufacturing when the government raises subsidy levels or the contrast/assimilation effect is relatively obvious. (2) The outsourcing mode is more beneficial in promoting the sales of remanufactured products and is more environmentally friendly, while the authorization mode is better in regards to consumer surplus and social welfare. (3) OEM, TPR and CLSC could benefit from network externality increasing. The stronger contrast effect (assimilation effect) is profitable to the OEM and CLSC (TPR), but hurts the TPR (OEM and CLSC). (4) Government subsidy can significantly reduce consumer spending on remanufactured products. CLSC members encroach government subsidies which are offered to consumers through pricing adjustments. The findings provide managerial implications for OEMs’ remanufacturing mode strategy in the context of the contrast/assimilation effect and network externality of remanufactured products under government subsidy.

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Section: Contrast/assimilation Effect In Clscsmentioning

confidence: 99%

Authorization or Outsourcing: Considering the Contrast/Assimilation Effect and Network Externality of Remanufactured Products under Government Subsidy

Hu,

Meng,

Xue

et al. 2023

Sustainability

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“…At the end of product life, resource recovery and environmental protection in the process of end-of-life product treatment have become more and more important issues in the world. Thus, a series of regulatory policies on remanufacturing has been formulated to regulate supply chain recycling and remanufacturing to promote the development of the remanufacturing industry [17][18][19][20][21][22][23][24][25]. Research on government policies on manufacturers' production emission reduction is as follows: Cao et al [17] found that government regulations can stimulate the enthusiasm of the reverse supply chain members to recycle waste products and implement environmental protection measures.…”

Section: Government Regulationsmentioning

confidence: 99%

The Optimal Remanufacturing Strategy of the Closed-Loop Supply Chain Network under Government Regulation and the Manufacturer’s Design for the Environment

2023

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To solve the problem of global warming and resources crisis, we adopt two remanufacturing strategies, denoted ‘In-House Remanufacturing Strategy’ and ‘Outsourcing Remanufacturing Strategy,’ respectively, for recycling and reusing waste products. However, to study the optimal remanufacturing strategy of a closed-loop supply chain (CLSC) network under government regulations and the manufacturer’s design for the environment, we use variational inequality to construct a CLSC network equilibrium model based on these two strategies. By using a comparative analysis of the decision-makers’ profits, carbon emissions, and carbon taxes, we show how the decision-makers should choose the optimal remanufacturing strategies under different government regulations and the manufacturer’s levels of design for the environment. The findings of the study show that the manufacturer’s design for the environment is conducive to resource recovery and promotes the development of remanufacturing activities. When manufacturers’ levels of design for the environment are high, although manufacturers will adopt the outsourcing remanufacturing strategy to obtain high profits, they will lose environmental benefits. The findings also show that the new product handling fee policy in government regulations can promote energy conservation and emission reduction, and the reproduction subsidy policy can encourage product remanufacturing. Moreover, when the government’s subsidy for remanufactured products increases to a threshold, it will prompt manufacturers to adopt the outsourcing remanufacturing strategy; and the remanufacturing subsidy threshold is negatively correlated with the manufacturer’s levels of design for the environment.

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“…They concluded that enterprises' decision making cannot just be based on long-term costs, but also needs to take into account a number of other factors, such as social responsibility and brand image. Guo et al [7] discussed how the assimilation effect in consumer purchase behavior impacts the original equipment manufacturer's choice of remanufacturing engagement under the cap-and-trade regulation.…”

Section: Cap-and-trade Regulationmentioning

confidence: 99%

“…To examine the concavity of the problem, we further calculate the second derivative of Equation (7) with respect to p B (z),…”

Section: Appendix a Proofmentioning

confidence: 99%

“…Many leading electronics brands, such as Xerox, Apple Inc., and Hewlett-Packard (HP), have launched remanufacturing programs. For example, HP launched the 'HP Planet Partners' program in 1991 and claimed that it has recycled more than 875 million ink and toner cartridges since then [7]. Greening products is another prominent way to reduce carbon emissions.…”

Section: Introductionmentioning

confidence: 99%

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Robust Emission Reduction Strategies under Cap-and-Trade and Demand Uncertainty

Guo

Chen

2022

Sustainability

Self Cite

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In this study, we consider robust emission reduction strategies for a monopolistic manufacturer facing demand uncertainty under governments’ cap-and-trade regulations. We model the manufacturer’s decision making and associated profits under four different emission reduction strategies: no mitigation measure, undertaking remanufacturing, improving the greening level, and both remanufacturing and improving the greening level. We find that the cap-and-trade regulation enhances the manufacturer’s motivation to be engaged in reducing carbon emissions. Furthermore, the manufacturer’s optimal choice of emissions reduction strategy depends on the level of carbon trading price and the degree of demand uncertainty. Specifically, there exists a threshold of carbon trading price at which the manufacturer’s optimal emissions reduction strategy will change. When the carbon trading price is low (below the threshold), the best strategy for the manufacturer to reduce emissions is to improve the greening level of the products. When the carbon trading price is high (above the threshold), the manufacturer should consider both remanufacturing and improving the greening level. Moreover, the threshold of the carbon trading price is further impacted by the demand uncertainty. With market demand uncertainty rising, the threshold of carbon trading price increases as well. Finally, we find raising the carbon trading price may not necessarily benefit the environment. Overpriced carbon trading may hurt the manufacturer’s production instead of encouraging them to take emission reduction measures.

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Remanufacturing Strategy under Cap-and-Trade Regulation in the Presence of Assimilation Effect

Cited by 5 publications

References 35 publications

Authorization or Outsourcing: Considering the Contrast/Assimilation Effect and Network Externality of Remanufactured Products under Government Subsidy

Authorization or Outsourcing: Considering the Contrast/Assimilation Effect and Network Externality of Remanufactured Products under Government Subsidy

The Optimal Remanufacturing Strategy of the Closed-Loop Supply Chain Network under Government Regulation and the Manufacturer’s Design for the Environment

Robust Emission Reduction Strategies under Cap-and-Trade and Demand Uncertainty

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