Pricing and coordination of remanufacturing supply chain considering remanufacturing capacity and preferences under government mechanisms

Abstract

The management of recycling and remanufacturing supply chains, which can help enterprises achieve low pollution, low energy consumption and sustainable development, has become a new strategy of modern enterprises. The factors of supply chain and government mechanisms will have an impact on enterprise decisions for recycling, remanufacturing and social welfare. In order to promote the sustainable operation of the supply chain, considering the coordination role of government mechanisms and supply chain, a recycling and remanufacturing supply chain model composed of a manufacturer, retailer and recycler is constructed. This paper discusses the pricing decision of new/remanufactured products, supply chain performance level, such as remanufacturing effort, publicity service efforts and profit, and social welfare in five models of three situations: centralized situation, including non-government mechanisms and non-supply chain coordination; manufacturer-led situation, including non-government mechanisms and non-supply chain coordination, government mechanisms and non-supply chain coordination, government mechanisms and supply chain coordination; government-led situation, including government mechanisms and non-supply chain coordination. It is found that under manufacturer-led situations, the government subsidy and bonus-penalty mechanisms can encourage manufacturer and retailer to actively participate in the recycling and remanufacturing activities. The supply chain coordination contract can further enhance the role of the consumer market and promote the implementation of government mechanisms. Manufacturer adopts a cost-sharing contract to encourage recyclers to carry out recycling activities. Under certain conditions, the contract can effectively improve the benefits and social welfare. The research conclusions have important theoretical and practical application value for the coordination and cooperation among enterprises in the supply chain and the formulation of government mechanisms.