Selection of best buyback strategy for original equipment manufacturer and independent remanufacturer – game theoretic approach. Issue 18 (17th September 2021)

• Record Type: Journal Article
• Authors: Ray, Ankita; De, Arijit; Mondal, Sandeep; Wang, Junwei
• Is Part Of: International journal of production research. Volume 59:Issue 18(2021)
• Page Start: 5495
• Page End: 5524
• Publication Date: 2021-09-17
• Subjects: Remanufacturing -- buyback strategy -- pricing strategy -- game theory -- price competition; Factory management -- Periodicals; 658.57
• DOI: 10.1080/00207543.2020.1784486
• Languages: English
• ISSNs: 0020-7543

Abstract

ABSTRACT: The study considers two supply chain members, an original equipment manufacturer (OEM) producing new and remanufactured products and an independent remanufacturer (IR) collecting used products of OEM and producing remanufactured products. Furthermore, OEM and IR are involved in competition to collect the used products by providing various exciting offers to the customers. A two period analytical model is developed to investigate the profitable buyback strategy for OEM and IR under low and high pricing strategy. In first period, OEM performs remanufacturing and considers a strategy to collect the product cores from end users under a certain pricing strategy. Under extensive game format, IR joins in the remanufacturing business to compete with OEM and based on OEM's attractive buyback strategy, IR adopts a profitable pricing strategy. The research addresses oligopoly market where OEM is not the single seller of new product and other sellers are interested in remanufacturing. In such scenario, OEM has less control over used products collection of other brand and OEM cannot restrict independent remanufacturer to venture within remanufacturing business. The findings of the study depicted that low pricing strategy "exchange offer" is profitable buyback decision for OEM and "incentive offer" is profitable buyback decision for independent remanufacturer.