Pricing and Coordination of Remanufacturing Supply Chain with Government Participation considering Consumers’ Preferences and Quality of Recycled Products

Abstract

Remanufacturing has become an important way to realize sustainable development strategy. For remanufacturing closed-loop supply chain under different circumstances, many factors are considered, such as consumers’ different preferences for the purchase and payment of remanufactured products and the quality of recycled products. In this study, three models are presented for supply chain system, including a manufacturer lead and a retailer recycle. While nongovernment participation and non-supply-chain coordination are considered in model I, model II has government participation but non-supply-chain coordination, and model III has both government participation and supply chain coordination. The equilibrium decisions are derived for each model using the game-theoretic approach. The study found that consumers’ preferences affect the pricing decisions of remanufactured products. When consumers’ willingness to buy and pay for remanufactured products is close to that of new products, the total profit of the supply chain will significantly increase; the quality of recycled products will also influence the pricing decisions of new/remanufactured products, which in turn will affect the market demand for products. Government participation is conducive to encouraging manufacturer, retailer, and consumers to actively participate in the recycling and remanufacturing activities of used products. Supply chain coordination contracts can further enhance the role of the consumer market and promote the implementation of government policies. Under certain conditions, revenue sharing contract coordination can significantly increase the total profit of the supply chain system. The research conclusions have certain reference value for the coordination among the nodes of the remanufacturing supply chain and the formulation of policies with government participation.