Refurbishing Strategy and Pricing Decisions with Return Policy

• Main Authors: Ming-He Jheng, 鄭茗河
• Other Authors: Cheng-Han Wu
• Format: Others
• Language: zh-TW
• Published: 2016
• Online Access: http://ndltd.ncl.edu.tw/handle/gs7gy6

碩士 === 國立雲林科技大學 === 工業工程與管理系 === 105 === With the increase on the attention of consumer right, many firms consider to refurbished products from consumer returns in order to reduce profit lose. However, refurbished products may cannibalize the market of new products. Thus, in this study, we construct a duopolistic market with product return, in which there are two firm sell products through a common retail platform and compete each other firm. The manager of the retail platform decides the return fee, and the firm choose their sales prices and determine whether to sell refurbished products. According to the refurbishing strategy there are four possible strategic combinations: Strategic combination 1 represents that no firm sells refurbished product; Strategic combinations 2 and 3 represents that one firm sells refurbished product but the other does not; and Strategic combination 4 indicates that both firm sell refurbished products. We investigate the firms’ equilibrium decisions and profits under the four strategic combinations. We find that (1) refurbishing strategy is a profitable strategy for the supply chain members; (2) the difference of the cost structures between the firm leads to the different equilibrium strategic combination, that is, when the firms’ cost structures are identical, the equilibrium is at Strategic combination 4, otherwise, the equilibrium is at Strategic combination 2 or 3; (3) when the difference of consumer preference toward the firm increases, the firm will increase their sales prices, then leading their profits to be improved.