The Optimal Pricing Strategy of Manufacturer by Considering Distributor Providing Repair Service
Date Issued
2012
Date
2012
Author(s)
Lin, Yu-Ling
Abstract
As green supply chains (GSCs) have setting significant attention and concern, this study investigates the optimal pricing policy of a manufacturer in the green supply chain. From the perspective of a manufacturer, a distributor collect used products from customers, and it can repair the recycled products and sell to the market or sell them to the manufacturer for remanufacturing. In addition, the distributor sells the usable products purchased from the manufacturer and repaired products to the customers at the same time. Hence, this study establishes a two-stage game model, considering the interaction between a manufacturer and a distributor within the context of Bertrand duopoly and price competition to find the optimal pricing policy of the manufacturer. Next, a sensitivity analysis is conducted to discuss how different valuations for a repaired product, collection rate, market size, ratio of new product cost to remanufactured cost and repairing cost influence the manufacturer profit and distributor profit. The results show that (1) When the valuation for a repair product is higher, the manufacturer should increase the purchase price of collected products (2) The manufacturer should collaborate with the distributor to increase the collection rate to increase its profit (3) The manufacturer should choose product under the condition of low valuation for a repair product, low new product cost, and high repairing cost to increase its profit.
Subjects
Green Supply Chain
Reverse Logistics
Game Theory
Pricing Policy
Type
thesis
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