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Pricing Decisions Of Refurbished Products Under A Supply Chain

Posted on:2021-05-25Degree:DoctorType:Dissertation
Country:ChinaCandidate:Y ZhangFull Text:PDF
GTID:1368330605979407Subject:Management Science and Engineering
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Product returns are one of the most crucial problems in the retail world with the development of shopping online and the popularity of customer service ? free return within 15 days.In the US,an estimated 8%-10%of in-store sales is returned whereas online sales may result in 25%-40%returns.Thus,how to reduce the loss from con-sumer return is a problem that needs to be considered in the industry.The products from consumer returns are still worth a huge amount of money as most of them function well.The retailer can repack and refurbish the returned products easily and then resell at a discount price to the consumers.Therefore,some issues occur:how to make pricing decisions for the refurbished product;how the new product's price and supply chain players' decisions change with the refurbished product are provided.This dissertation investigates the product's pricing decisions under different back-grounds and channel models.The third chapter from the perspective of the retailer investigates retailer and sup-plier's product strategies and pricing decisions.The consumers can choose either a new product or refurbished product when refurbished products are provided.Selling refurbished product can attract more consumer which leads to more profit but have a cannibalization effect on the sales of new product at the same time.Then the research questions arise,the retailer chooses whether to refurbish and sell the refurbished prod-uct or not and how the retailer's decisions affect the supplier's wholesale price of the new product.In this chapter,we use the Economic Utility Theory and consumer be-havior model to illustrate consumers' purchase choice and derive the sales and profit of both the retailer and the supplier.By solving the maximizing problem,we find that the retailer will sell the refurbished product only when its refurbishing cost is small;when refurbishing cost is moderate,the retailer will eventually not sell refurbished products,but' its profit can be significantly improved and the double marginalization effect can be mitigated.Selling refurbished product is a powerful bargaining tool for the retailer.We also find that the supplier's wholesale price and retail price of the new product will change in the opposite direction under certain conditions,which is in contrast with the typical pass-through effect.Chapter 4 focuses on green consumers in the market and investigates supplier's and retailer's refurbishment decisions and optimal pricing decisions.When the refurbished product supplied,there are three decision models,i.e.,centralized decision,supplier-refurbished decentralized decisions,and retailer-refurbished decentralized decisions.Using consumer utility model to illustrate the consumers' behavior and then get the sales of both new and refurbished product,then building a model with one supplier and one retailer,investigates the optimal prices of the new and refurbished product and the greenness level of the refurbished product under three different refurbish and decision models.After comparison,we can find that the maximum whole channel profit can be obtained in the centralized decision model with more sales and low products' prices as well as refurbished product's high greenness level.The supplier prefers to refurbish and then sell the refurbished product to the retailer at a wholesale price when the cost of the refturbished product is small and the ratio of the green consumer is high.Furthermore,the profits of the retailer and the supplier can not be in the same direction when both the green consumer ratio and the acceptance of the refurbished product are low under the retailer refurbishing model.Chapter 5 pays attention to the player who does the refurbishment and discusses OEM(the original equipment manufacturer)and the third party retailer's product deci-sions on whether selling the new product and the refurbished product or not and pricing decisions.First,OEM sells the new product to the consumer and also chooses whether provides new product at wholesale price to the third party retailer,however,OEM and the third party retailer make decisions independently on whether refurbishing and sell-ing refurbished product.According to the different choices of both the OEM and the third party retailer,we build five models.By illustrating consumer purchasing behav-ior,we get the products' sales and both players' profit functions under different models.Using the Stackelberg games model,we obtain the optimal pricing decisions under dif-ferent models.After comparison,we find that OEM and the whole supply chain can obtain the maximum profit when OEM's refurbished product's cost is high and that of the third party retailer is moderate and the two players selling new and refurbished prod-uct at the same time.Moreover,the OEM can obtain even more profit from charging the third party retailers franchising fee under specified condition.The OEM prefers to monopoly selling the new product in other cases.This dissertation focuses on the pricing decisions of the refurbished product and does a series of research on the interactions and decisions between players that doing the refurbishing and other players in a supply chain.This dissertation firstly jointly consid-ers the limited quantity of the refurbished product and transferred consumer,consumer segmentation,and players in supply can refurbish and sell refurbished products inde-pendently,which would enrich the existing the refurbished product's pricing decisions literature.In addition,the research provides some references for supply chain manage-ment and pricing decisions of the refurbished product.
Keywords/Search Tags:Game Theory, Closed-loop Supply Chain, Refurbished Product, Pricing Decisions, Green Consumer, Supply Chain Management
PDF Full Text Request
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