A Study Of Pricing Strategies For The Auto Parts Manufacturer And The Insurance Company Under Government Subsidies

The development of remanufactured auto parts can achieve resource recycling and help achieve the goal of carbon peaking and carbon neutrality.Although the quality level of remanufactured parts and new parts is the same,but the cost and price are relatively lower,so the government promotes remanufactured parts both to help manufacturers reduce costs and can help consumers reduce maintenance costs.However,there are some obstacles to the promotion of remanufactured parts.Many manufacturers are reluctant to produce remanufactured parts because of the complicated process of producing and inspecting certified remanufactured parts,and some consumers are not sufficiently aware of remanufactured auto parts.Therefore,how to guide manufacturers to produce and promote the use of remanufactured parts for consumers is the government’s current urgent problem.Based on the above,this thesis considers the heterogeneity of consumers’ willingness to pay for new and remanufactured parts,and constructs a game model of auto parts remanufacturing supply chain with the participation of insurance companies.In this model,the manufacturer produces both new and remanufactured parts,and the insurance company cooperates with the manufacturer to provide the corresponding parts insurance scheme for consumers to protect their rights and interests.In this paper,three cases of no government subsidies,subsidized consumers and subsidized manufacturers are considered,and a combination of theoretical research and numerical simulation analysis is used to analyze consumers’ awareness of remanufactured parts and the impact of different government subsidies on the decision making and profitability of supply chain players,in order to explore which government subsidies can promote the development of auto parts remanufacturing and take into account the interests of consumers,the manufacturer and the insurance company.The main findings of this thesis are as follows: first,the government-subsidized consumer mechanism is effective in expanding the market share of remanufactured parts and maximizing social welfare when the government-subsidized consumer,subsidized manufacturer,and unsubsidized mechanisms are all available.Otherwise,the government-subsidized manufacturer mechanism is optimal.Second,contrary to intuition,the government-subsidized consumer mechanism is more beneficial to manufacturers than the subsidized manufacturer mechanism.Third,whether or not the government implements the subsidized consumer mechanism is related to the consumer’s rate of additional insurance purchase.When the additional insurance purchase rate is lower(higher)than 20%,the government implements(does not implement)the subsidized consumer mechanism.Fourth,consumer awareness of remanufactured parts positively affects the demand for remanufactured parts,related pricing,and the revenue of each supply chain player,and negatively affects the demand for new parts,but does not affect the pricing of new parts.The findings of this thesis can provide some suggestions for the government,the manufacturer and the insurance company.From the government perspective,a subsidy mechanism should be implemented under appropriate circumstances to guide more enterprises to invest in remanufacturing of auto parts and to promote the use of remanufactured products by consumers.From the enterprises’ perspective,investing in remanufacturing can help increase their economic benefits and enhance their corporate image.