The Optimal Subsidy Strategies For Remanufacturing Authorization Of Original Equipment Manufacturers Under Different Government Goals

In reality,Original Equipment Manufacturer(OEM)usually uses authorization and licensing policies to entrust other parties to implement remanufacturing.For two authorized remanufacturing modes(dealer remanufacturing and third-party remanufacturing),the optimal remanufacturing subsidy intensity and its impact on members’ decision-making,profits and stakeholders are respectively explored for two government goals(remanufacturing revenue and total social welfare),and then the two authorized remanufacturing modes are compared.The study shows that:(1)Under dealer remanufacturing mode,no matter which government goal is,the optimal subsidy intensity of the MR model is the lowest.From the perspective of the OEM,the distributor,the consumers,and total social welfare,MTR model is the worst choice,but this model can produce the highest remanufacturing income.Under the remanufacturing revenue goal,the members’ profit,consumer surplus and total social welfare of MR model are better than those of MRT model,while under the total social welfare goal,the consumer surplus and total social welfare of MRT model are the same as those of MR model.(2)Under third-party remanufacturing mode,when the government takes remanufacturing revenue as the optimization goal,it should collect business tax from the third party in MRT model,and the tax intensity increases with consumer preference.In two government goals of remanufacturing revenue and total social welfare,the subsidy intensities of the MTR model and MRT model are the highest,respectively.The MRT model is always a better choice for the OEMs,the third party and the whole system,consumers and total social welfare.However,the dealer prefers to the MTR model,and there will be a second-mover advantage in the game between the dealers and the third party.(3)Regardless of the remanufacturing mode,under the government’s remanufacturing revenue goal,a higher consumer preference is conducive to improving remanufacturing revenue.However,under the total social welfare goal,only when the remanufacturing cost advantage is relatively small,the remanufacturing subsidies can also boost remanufacturing revenues,otherwise the government’s dual goals may conflict with each other.(4)Under both government goals,both the OEM and the whole system prefer to the MRT model.Under the remanufacturing revenue goal,the T-MRT model is always optimal.Under the total social welfare goal,when the remanufacturing cost advantage is relatively low,the T-MRT model is still the optimal.However,when the remanufacturing cost advantage is moderate level and above,R-MRT model is the most beneficial to the OEM and the overall system.For the third party,the optimal choice under both two government goals is R-MTR model.For the dealer,the optimal choices under the remanufacturing revenue goal and the total social welfare goal are the R-MR model and R-MRT model,respectively.Under the target of remanufacturing revenue,the government subsidy efficiency of the third-party remanufacturing mode is higher.Under the goal of total social welfare,the government achieves the optimal total social welfare in the third-party remanufacturing mode through high subsidy intensity.When the remanufacturing cost advantage is relatively small,the remanufacturing revenue of third-party remanufacturing are higher and the MTR model is the optimal.When the remanufacturing cost advantage is at a medium or above level,the remanufacturing revenue revenue of dealer remanufacturing is higher and the optimal of the MTR model is still preferred.The above conclusions can provide decision-making references for the government to improve the efficiency of remanufacturing subsidies and the OEM to select authorization strategies in reality.