Flexible versus simple trade-in strategy for remanufacturing

Authors

Zhaojun Yang
Xu Hu
Jun Sun, The University of Texas Rio Grande ValleyFollow
Yali Zhang

Document Type

Article

Publication Date

8-8-2020

Abstract

Some enterprises recently start to offer the flexible trade-in option to attract customers from competitors, in contrast to the simple one that only allows them to return used products to the same manufacturers for new. Based on analytical and numerical analyses, this study compares the environmental impacts of two trade-in strategies (simple versus flexible) in combination with different carbon tax policies. From the perspective of consumer switching behaviour, a Hotelling model with two market segments is established. Under the flexible trade-in strategy, the carbon emission of enterprises turns out to be significantly higher than that under the simple trade-in strategy. An appropriate carbon tax policy, especially with preferential tax rates on green products, is capable of guiding enterprises to choose a more environment-friendly trade-in strategy included in the model. The findings fill the research gap in comparing the pros and cons of simple and flexible trade-in strategies in terms of sustainable development, and provide managers and policy-makers the insights on how to promote the healthy development of the remanufacturing industry with trade-in strategizing and carbon taxation.

Comments

© Taylor & Francis. Original published version available at https://doi.org/10.1080/01605682.2020.1796536

Recommended Citation

Yang, Z., Hu, X., Sun, J., & Zhang, Y. (2020). Flexible versus simple trade-in strategy for remanufacturing. Journal of the Operational Research Society, 1–18. https://doi.org/10.1080/01605682.2020.1796536

Publication Title

Journal of the Operational Research Society

DOI

10.1080/01605682.2020.1796536