Optimal pricing decisions under the coexistence of “trade old for new” and “trade old for remanufactured” programs
Journal
Transportation Research Part E: Logistics and Transportation Review
Journal Volume
106
Pages
337-352
Date Issued
2017
Author(s)
Abstract
Under the coexistence of “trade old for new” (TON) and “trade old for remanufactured” (TOR) programs, we study a firm's optimal pricing decisions and identify the thresholds that determine whether the firm should offer TON and TOR simultaneously. The result shows that adopting two kinds of trade-ins simultaneously does not necessarily benefit the firm and that the firm should use different trade-in schemes under different conditions. Moreover, we extend the model to the case with budget constraints on the TOR subsidy. The result shows that the firm's profit decreases when the actual TOR quantity exceeds the upper limit.
Type
journal article