Pricing Decisions for New/Remanufactured Products in a Leasing–Selling Closed-Loop Supply Chain With Consumers' Anticipated Regret

Abstract

Previous studies have extensively examined the pricing decisions for new and remanufactured products while ignoring the manufacturer's leasing strategy and the anticipated regret of consumers generated from various choices, along with the valuation uncertainty of remanufactured products. This study targeted this research gap by investigating pricing decisions with consumers' anticipated regret in a leasing–selling closed-loop supply chain (LSCLSC) wherein the manufacturer has four strategies: selling new and leasing remanufactured products (NR), selling and leasing new products (NN), selling remanufactured and leasing new products (RN), and selling and leasing remanufactured products (RR). Subsequently, these strategies were compared and the impact of anticipated regret was revealed. The results show that (1) the NN and RN strategies were the optimal leasing–selling strategies. (2) Consumers' anticipated regret was not always detrimental to the manufacturer. Under the NN and RN strategies, when consumers value remanufactured products more in the selling model than the leasing model, the manufacturer can reduce production costs and leverage consumers' anticipated regret, thereby increasing sales and rental prices and improving profits. However, when consumers value remanufactured products less in the selling model than the leasing model, anticipated regret has adverse effects. Therefore, manufacturers should decrease consumer sensitivity to anticipated regret to maximize profits. Our results provide timely insights for manufacturers to manage LSCLSC considering anticipated regret.