Is it wise to compete or to collaborate? Remanufacturing business models under collective extended producer responsibility legislation

Arijit De, Anita Ray, Tanmoy Kundu, Jiuh-Biing Sheu

Research output: Contribution to journalArticlepeer-review

Abstract

Collective extended producer responsibility (CPR) legislation aims to accomplish manufacturers’ extended producer responsibility (EPR) through a common channel of product recovery activities. This work intends to study the impact of the CPR legislation system on competitive and collaborative business models of original equipment manufacturers (OEMs) and independent remanufacturers (IRs). Therein, we developed a two-period competitive and collaborative model considering an oligopoly market scenario for analysing optimal remanufacturing and pricing strategies of OEMs and IRs. Government subsidies promote the remanufacturing activities, and their effects are examined on optimal remanufacturing and pricing decisions for competitive and collaborative models under CPR legislation. The result highlights that competition with IRs under the CPR legislation system within oligopoly market scenarios is profitable for OEMs. Furthermore, the result indicates that a competitive business model increases consumer surplus, increasing used products collection and remanufacturing. The findings benefit OEMs of identical products from implementing a profitable business model under CPR legislation to restrict the availability of low-quality remanufactured products of IRs, thereby protecting the brand image and controlling the cannibalization effect on new products selling.
Original languageEnglish
Article number103294
JournalTransportation Research. Part E: Logistics and Transportation Review
Volume179
Early online date1 Oct 2023
DOIs
Publication statusPublished - 1 Nov 2023

Keywords

  • Collective extended producer responsibility
  • Competition and collaboration
  • Game theory
  • Remanufacturing business
  • Supply chain management

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