The Supply Chain and New Products

New product presale is a strategic behavior of manufacturers to transfer inventory risks to consumers. The research purpose of this paper is to examine the presale discount, inventory, and service level decisions in an e-commerce supply chain, where the first period is the presale period and the second is the selling period for the new product. First, consumers were divided into two types—those who are risk averse and those who are not. Then, considering different presale discounts applied for new products, three presale strategy models were discussed: no-presale strategy, presale strategy with a moderate discount, and complete presale strategy, and the optimal decisions of e-commerce supply chain members were obtained under different valuations of the new product by consumers. Finally, the effects of the correlation coefficient between the numbers of the two types of consumers, the loss aversion degree of consumers, and the marginal profit in the sales period on the optimal discounted price and the maximum expected profit were analyzed. The conclusions of this article show that the presale strategy is not always optimal but depends on the parameters of the market and the type of consumers. For example, when the correlation coefficient between the two types of consumers is high, it is more profitable for the suppliers if they choose the presale strategy with a moderate discount, while e-commerce platforms tend to adopt the no-presale strategy. The optimal discounted price in the complete presale case is not necessarily lower than that in the moderately discounted presale case. If the marginal profit is high in the normal sales period or consumers are less averse to losses, suppliers are more likely to adopt the complete presale strategy. The research conclusions provide some theoretical reference for companies in the development of new product presale strategies in the e-commerce supply chain.

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How Does Licensing Remanufacturing Affect the Supply Chain Considering Customer Environmental Awareness?

Sustainability ◽

10.3390/su11071898 ◽

2019 ◽

Vol 11 (7) ◽

pp. 1898 ◽

Cited By ~ 2

Author(s):

Zongbao Zou ◽

Fan Wang ◽

Xiaofan Lai ◽

Jingxian Hong

Keyword(s):

Game Theory ◽

Supply Chain ◽

Closed Loop ◽

New Products ◽

Environmental Awareness ◽

Third Party ◽

Technology Licensing ◽

Theory Approach ◽

Potential Threat ◽

Closed Loop Supply Chain

As sustainability issues are receiving increasing attention in society, in recent years many manufacturers have been adopting remanufacturing via technology licensing. This paper uses a game theory approach to investigate this strategy of a manufacturer under a closed-loop supply chain consisting of one supplier, one manufacturer, and one third-party remanufacturer (TPR), with the consideration of customer environmental awareness. In particular, the supplier supplies the components to the manufacturer and the manufacturer adopts technology licensing remanufacturing via the TPR. We explicitly characterize the reactions between the supplier and the manufacturer as being in equilibrium after adopting the technology licensing. We find that only when remanufacturing is a potential threat to the supplier is the performance of the supply chain improved and the double marginalization effect effectively eliminated. Moreover, remanufacturing by technology licensing only increases the profit of the manufacturer, but decreases the profit of the supplier. Interestingly, contrary to traditional wisdom, the existence of remanufactured products does not reduce the quantity of new products. Furthermore, remanufacturing by technology licensing may not always improve the environment, but customers in the market have environmental awareness that facilitates remanufacturing.

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Competition and Integration in Closed-Loop Supply Chain Network with Variational Inequality

Mathematical Problems in Engineering ◽

10.1155/2012/524809 ◽

2012 ◽

Vol 2012 ◽

pp. 1-21 ◽

Cited By ~ 2

Author(s):

Gengui Zhou ◽

Yuxiang Yang ◽

Jian Cao

Keyword(s):

Supply Chain ◽

Variational Inequality ◽

End Of Life ◽

Closed Loop ◽

New Products ◽

Horizontal Merger ◽

Supply Chain Network ◽

Closed Loop Supply Chain ◽

Production Quantity ◽

And Storage

A closed-loop supply chain network involves the manufactured and remanufactured homogeneous products. It comprises operation links to represent business activities including manufacturing/remanufacturing activities, treatment activities for EOL products, transportation activities, and storage activities, which are performed by the firms. Among all closed-loop supply chain problems, the horizontal merger of oligopolistic firms is so important and attracting to both businessman and researchers. In this paper, the interaction of the competitive firms prior to horizontal merger is analyzed. Three networks including prior to horizontal merger, postpartial merger, and complete merger are studied. Simultaneously, three economical models for these networks on different conditions of mergers are established and discussed. The variational inequality formulations are used for these three models, whose solutions give out the production quantity of new products, and remanufactured products, the product flows for new products, remanufactured products and end-of-life products at every path, the demand quantity, the recovery quantity of end-of-life products and the equilibrium prices. Finally, numerical examples are tested and illustrated for the proposed models.

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Development of cores acquisition model with two switching mechanisms in a retailer-oriented closed-loop supply chain system

Eastern-European Journal of Enterprise Technologies ◽

10.15587/1729-4061.2021.225147 ◽

2021 ◽

Vol 2 (3 (110)) ◽

pp. 6-15

Author(s):

Evi Yuliawati ◽

Pratikto Pratikto ◽

Sugiono Sugiono ◽

Oyong Novareza

Keyword(s):

Supply Chain ◽

Closed Loop ◽

New Products ◽

Product Returns ◽

Fixed Rate ◽

Supply Chain System ◽

Closed Loop Supply Chain ◽

Flat Rate ◽

Taking Charge ◽

Rate Mechanism

Retailer-Oriented Closed-Loop Supply Chain (ROCLSC) is an integration of forward and reverse supply chains with retailer taking charge of the remanufacturing, distribution, and collecting activities. This type of mechanism is quite effective, since the majority of product returns management is performed by the retailer. However, in practical industries, the implementation of ROCLSC is still limited. In this study, we investigate a ROCLSC system that involves an Original Equipment Manufacturer (OEM) and a retailer. OEM plays a role as a producer of new products, while the retailer is in charge of remanufacturing, collecting, as well as selling and distributing both newly manufactured and remanufactured products. We develop a mathematical model to maximize the profit of each party. Although several studies have developed models for cores acquisition, here we apply a different cores switching mechanism. We introduced the fixed rate and flat rate mechanisms used in the business-to-business (B2B) system, where product functions are very important to consumers. In addition, this research focuses on ROCLSC where most of the existing cores acquisition models are Manufacturer-Oriented Closed-Loop Supply Chain (MOCLSC). The result of this study shows that the retailer will get higher profits when the product returns are acquired through the fixed rate mechanism, rather than the flat rate mechanism. Therefore, determining the optimal amount of cores collected through the fixed rate mechanism will increase the retailer’s profit, as well as joint profit of both parties. From the results, we also point out an interesting note that the retailer should increase efforts to sell new products along with the increasing proportion of consumer Willingness to Pay (WTP) for remanufactured products. Hence, both OEM and retailer profits can be increased consecutively

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Optimal Pricing Strategy and Government Consumption Subsidy Policy in Closed-Loop Supply Chain with Third-Party Remanufacturer

Sustainability ◽

10.3390/su12062411 ◽

2020 ◽

Vol 12 (6) ◽

pp. 2411 ◽

Cited By ~ 2

Author(s):

Lijun Meng ◽

Qiang Qiang ◽

Zuqing Huang ◽

Baoyou Zhang ◽

Yuxiang Yang

Keyword(s):

Supply Chain ◽

Closed Loop ◽

New Products ◽

Sustainable Manufacturing ◽

Third Party ◽

Government Consumption ◽

Closed Loop Supply Chain ◽

Subsidy Policy ◽

Optimal Pricing Strategy ◽

The Government

Due to the increasing awareness of sustainable manufacturing, remanufacturing has been widely accepted by enterprises in many countries. In the process of Closed-Loop Supply Chain (CLSC) development, to stimulate the demand for remanufactured products, the Chinese government’s interventions such as the “Trade old for Remanufactured” program cannot be ignored. However, prior research has not answered the questions of whether governments should offer consumption subsidies and how to determine the optimal subsidy value. This paper investigates the optimal government consumption subsidy policy and its impact on the operation of Closed-Loop Supply Chain (CLSC) where an Original Equipment Manufacturer (OEM) produces new products, while a Third-Party Remanufacturer (TPR) remanufactures the used products collected from consumers. A game model with a leader (government) and two followers (OEM and TPR) is then introduced. The government determines the consumption subsidy to maximize the social welfare, while the TPR and OEM attempt to maximize their own profit functions. Game theoretic models are proposed to explore and compare the scenarios, i.e., CLSC with a consumption subsidy policy and without a consumption subsidy policy. The equilibrium characteristics with respect to the government’s consumption subsidy decisions and the price decisions for chain members are derived. Based on the theoretical and numerical analysis, the results show that: (1) governments should not always offer a consumption subsidy; (2) the consumption subsidy cannibalizes demand for new products while boosting the demand for remanufactured products; (3) the consumption subsidy should be shared between the TPR and consumers when the TPR raises the sales price of remanufactured product; (4) the members of the CLSC do not always benefit from the consumption subsidy policy.

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