Optimal remanufacturing strategies in name-your-own-price auctions with limited capacity

Qifei Wang, Jianbin Li, Hong Yan, Stuart X. Zhu

Research output: Journal article publicationJournal articleAcademic researchpeer-review

16 Citations (Scopus)

Abstract

We study optimal pricing and production strategies faced by a manufacturer in a remanufacturing/manufacturing system. In the reverse channel, returns are collected under a name-your-own-price (NYOP) bidding mechanism. The manufacturer has a limited capacity to produce new and remanufactured products. We characterize the optimal decisions of the consumers and the manufacturer. We find that under the NYOP mechanism, the manufacturer׳s optimal strategies mainly depend on the bidding cost, the cost saving of remanufacturing, the production capacity, and the market scale. In addition, when remanufacturing needs more capacity than manufacturing, the manufacturer may adopt pure manufacturing strategy without remanufacturing. We also compare this mechanism with the traditional list-price mechanism and find that the manufacturer prefers the NYOP mechanism under the conditions of a low reverse market share, a high manufacturing cost, a sufficient capacity, or a low capacity requirement of remanufacturing. Numerical studies investigate the effect of key parameters on the manufacturer׳s profit and some managerial insights are obtained.
Original languageEnglish
Pages (from-to)113-129
Number of pages17
JournalInternational Journal of Production Economics
Volume181
DOIs
Publication statusPublished - 1 Nov 2016

Keywords

  • Capacity constraint
  • List price
  • Name-your-own-price
  • Remanufacturing

ASJC Scopus subject areas

  • Business, Management and Accounting(all)
  • Economics and Econometrics
  • Management Science and Operations Research
  • Industrial and Manufacturing Engineering

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