Pricing Decision for Reverse Logistics System under Cross-Competitive Take-Back Mode Based on Game Theory
Abstract
:1. Introduction
- The one-to-one cooperation between manufacturers and recyclers in the competitive take-back mode is extended to multi-party cooperation, which enriches the situation that recyclers only cooperate with a single manufacturer in previous studies.
- The base allocation rate is introduced into the multi-party cooperation between manufacturers and recyclers, and the impact of the manufacturer’s cooperation preference on the pricing and profit of all participants is analyzed, so as to consider the complexity of the market environment further.
2. Literature Review
3. Model Construction of Reverse Logistics System Based on Game Theory
3.1. Model Description and Basic Assumptions
- 1. Manufacturers have the responsibility and obligation to bear the corresponding costs of waste products recycling and pay the recyclers (or NPO), which will inevitably increase their costs and indirectly affect product pricing, so the manufacturer’s product pricing will be affected by the recyclers’ decisions.
- 2. Whether the waste products collected by the recyclers are returned to the manufacturer for remanufacturing, they will get subsidies from the government.
- 3. The operating cost of the NPO is provided by the fund, and all the recycling fees collected from the manufacturers are distributed to the recyclers. The NPO does not generate extra profits by itself. In other words, it does not affect the competition between the two recyclers.
- 4. Ignore the recycling fees that recyclers (or NPO) pay to consumers when they recycle waste products from the consumer market.
- 5. The remanufactured product is identical with the new product in terms of performance, price and market recognition, and the quality of the recycled waste products for remanufacturing is constant, that is, the unit cost of the remanufactured product is constant.
- 6. The demand function of the market is a linear function.
3.2. Model Construction
4. Model Derivation
4.1. Cross-Competitive Take-Back Mode
4.2. Monopolistic Take-Back Mode
5. Model Parameter Constraint Analysis and Comparison of Two Take-Back Modes
5.1. Model Parameter Constraint Analysis
5.1.1. Existence Conditions of Nash Equilibrium
5.1.2. Non-Negative Market Demand Conditions
5.2. Comparison of Cross-Competitive and Monopolistic Take-Back Modes
6. Sensitivity Analysis
7. Case Analysis
8. Conclusions
Author Contributions
Funding
Conflicts of Interest
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Participant | Take-Back Mode Selection | |
---|---|---|
Manufacturers | <, >, choose cross-competitive take-back mode | |
Recyclers | ①When = 0.5 | and < <, <, choose cross-competitive take-back mode |
②When 0.5<≤1 and 0<≤ | ||
Otherwise, choose monopolistic take-back mode |
Parameter | Manufacturers (j = 1,2) | Recyclers (I = 1,2) | ||||||
---|---|---|---|---|---|---|---|---|
+ | + | + | + | + | + | |||
− | − | + | + | − | − | + | ||
+ | + | − | − | + | + | − | − | |
− | − | + | + | − | − | + | + | |
− | − | + | + | + | + | + | ||
− | / | + | / | − | / | / |
Parameter | Symbol | Value |
---|---|---|
Manufacturers’ market capacity | 50 | |
Elasticity of market demand (substitutability of the manufacturer’s products) | 0.2 | |
Recycling rate of WEEE | 0.3 | |
Remanufacturing rate of WEEE | 0.5 | |
Recyclers’ unit recycling cost | 3 | |
Economies of scale factor | 0.05 | |
Government subsidy for recyclers recycle unit WEEE | 10 | |
Unit cost of new product | 50 | |
Unit cost of the remanufactured product | 40 | |
Base allocation rate under cross-competitive take-back mode | 1 |
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Feng, D.; Yu, X.; Mao, Y.; Ding, Y.; Zhang, Y.; Pan, Z. Pricing Decision for Reverse Logistics System under Cross-Competitive Take-Back Mode Based on Game Theory. Sustainability 2019, 11, 6984. https://doi.org/10.3390/su11246984
Feng D, Yu X, Mao Y, Ding Y, Zhang Y, Pan Z. Pricing Decision for Reverse Logistics System under Cross-Competitive Take-Back Mode Based on Game Theory. Sustainability. 2019; 11(24):6984. https://doi.org/10.3390/su11246984
Chicago/Turabian StyleFeng, Dingzhong, Xinghui Yu, Yongbo Mao, Yangke Ding, Ye Zhang, and Zhiyan Pan. 2019. "Pricing Decision for Reverse Logistics System under Cross-Competitive Take-Back Mode Based on Game Theory" Sustainability 11, no. 24: 6984. https://doi.org/10.3390/su11246984