Dynamic pricing models for used products in remanufacturing with lost-sales and uncertain quality

In this paper, we investigate the remanufacturing problem of pricing single-class used products (cores) in the face of random price-dependent returns and random demand. Specifically, we propose a dynamic pricing policy for the cores and then model the problem as a continuous-time Markov decision process. Our models are designed to address three objectives: finite horizon total cost minimization, infinite horizon discounted cost, and average cost minimization. Besides proving optimal policy uniqueness and establishing monotonicity results for the infinite horizon problem, we also characterize the structures of the optimal policies, which can greatly simplify the computational procedure. Finally, we use computational examples to assess the impacts of specific parameters on optimal price and reveal the benefits of a dynamic pricing policy. © 2013 Elsevier B.V. All rights reserved.

Dynamic pricing for used products in remanufacturing with back orders(ABS 3* Journal, Accepted with Revision on 2nd December 2011).

In remanufacturing, the supply of used products and the demand for remanufactured products are usually mismatched because of the great uncertainties on both sides. In this paper, we propose a dynamic pricing policy to balance this uncertain supply and demand. Specifically, we study a remanufacturer’s problem of pricing a single class of cores with random price-dependent returns and random demand for the remanufactured products with backlogs. We model this pricing task as a continuous-time Markov decision process, which addresses both the finite and infinite horizon problems, and provide managerial insights by analyzing the structural properties of the optimal policy. We then use several computational examples to illustrate the impacts of particular system parameters on pricing policy.

Remanufacturer-Manufacturer Collaborative Model in the Smae Channel

This paper adds to the growing literature of market competition related to the remanufacturer by analyzing the model where the remanufacturer and the manufacturer collaborate with each other in the same channel. This paper investigates a single-period deterministic model which keeps the analysis simple so as to obtain sharper insights. The results characterize the optimal remanufacturing and pricing strategies for the remanufacturer and the manufacturer in the collaborative model

The Bright Side of Manufacturing–Remanufacturing Conflict in a Decentralised Closed-Loop Supply Chain

Researchers and managers broadly agree that original equipment manufacturers (OEMs), which have opportunities to produce both new and remanufactured products, are better off by centrally controlling their manufacturing and remanufacturing activities. Thus, OEMs should not remanufacture used products until the remanufacturing cost is sufficiently low to overcome the negative impact of new product cannibalisation. In this paper, we present a contrasting view of the manufacturing–remanufacturing conflict: OEMs sometimes benefit from the decentralised control mode under which they ignore the internal cannibalisation rather than the remanufacturing option. We consider a decentralised closed-loop supply chain in which one OEM can purchase new components from one supplier to produce new products and collect used products from consumers to produce remanufactured products. The key feature of our model is that the OEM can select a centralised or decentralised control mode to manage its manufacturing and remanufacturing activities before the supplier prices the new component. In a steady state period setting, we analyse the players’ optimal decisions and compare the OEM's profits under centralised and decentralised control modes. Our analytic results reveal that the decentralised control within the OEM can outperform the centralised control when the cost structure of producing new and remanufactured products satisfies certain conditions. Finally, the key findings are distilled in a conceptual framework and its managerial implications are discussed.

Bricks vs. clicks: Which is better for marketing remanufactured products?

The economical and environmental benefits are the central issues for remanufacturing. Whereas extant remanufacturing research focuses primarily on such issues in remanufacturing technologies, production planning, inventory control and competitive strategies, we provide an alternative yet somewhat complementary approach to consider both issues related to different channels structures for marketing remanufactured products. Specifically, based on observations from current practice, we consider a manufacturer sells new units through an independent retailer but with two options for marketing remanufactured products: (1) marketing through its own e-channel (Model M) or (2) subcontracting the marketing activity to a third party (Model 3P). A central result we obtain is that although Model M is always greener than Model 3P, firms have less incentive to adopt it because both the manufacturer and retailer may be worse off when the manufacturer sells remanufactured products through its own e-channel rather than subcontracting to a third party. Extending both models to cases in which the manufacturer interacts with multiple retailers further reveals that the more retailers in the market, the greener Model M relative to Model 3P.