Study On Design Of Waste Products Recycling Contract And Patent License Decisions Based On Remanufacturing

Currently, there remain two main types concerning the remanufacturing of the wastematerials, that is, Manufacturer remanufacturing and the Third-party manufacturersremanufacturing. Correspondingly, such questions occur as: If it is in the former case(Manufacturer remanufacturing), it remains a problem for manufacturers as to how to guaranteethe recycling quantity of waste materials; and if in the latter case (the Third-party manufacturersremanufacturing), for those third-party manufacturers, the risk of infringement of the originalpatented products has to be taken into consideration. Hence, based on the research literature andrelevant theory of remanufacturing closed-loop supply chain, this paper will focus on twoquestions: the manufacturer waste materials recycling contract design decisions and the originalmanufacturer patent licensing decision.As to the part concerning the waste materials recycling contract design，two kinds ofcontract models of waste products recycling for remanufacturing in heterogeneous market,including buyback contract and total fee of incentive contract, are built based on game theory.First, the two models will be analyzed, and the equilibrium solution of the decision variables andthe profit of manufacturer will be obtained. Second, the impact of consumer’s preferenceparameter, cost savings by remanufacturing and other key parameters on the two kinds ofcontract models will be examined. Through the comparison of the two contracts in terms ofprofit, recycling rate and retail price, the critical chosen value of contract models will be gained.Afterwards, the total fee of incentive contract model will be improved by taking intoconsideration the premium and penalty mechanism of government. Finally, a numerical examplewill be given to prove and analyze the conclusion of this research.As to the part concerning patent licensing decisions, this paper probes into the originalmanufacturer patent licensing decisions in the consumer homogeneous market. Two kinds ofpatent licensing including fixed patent licensing and per unit of product patent licensing aredesigned. By analyzing the two models, the optimal profit of the original manufacturer and thedecision variables equilibrium are obtained. Then realities that different consumers havedifferent cognition in new products and remanufactured products are taken into account, andaccordingly, the original manufacturer patent licensing decision model under consumer heterogeneity market are built. Based on the modeling analysis，the optimal of decision variableswill be obtained. By comparing the original manufacturer’s optimal profit of the two licensingmodels, the critical value influencing the original manufacturer’s selection of either patentlicensing models in both the consumer homogeneous market and the heterogeneity market willbe gained respectively. It is found that, regardless of the situation，compared with per unit ofproduct patent licensing, fixed patent licensing model is higher in recovery rate, but lower inwholesale and retail prices. Furthermore, two patent licensing models in different markets arealso analyzed in this paper and a numerical example is given to prove and analyze the conclusionof this research.