×

zbMATH — the first resource for mathematics

Remanufacturing with trade-ins under carbon regulations. (English) Zbl 1391.90224
Summary: Observing prevalent concerns about the influence of carbon emissions on climate change, we address the problem of remanufacturing with trade-ins under carbon regulations. We analyze the optimal pricing and production decisions of the manufacturer under the carbon tax policy and the cap and trade program. The results show that the introduction of carbon regulations can promote sales of remanufactured products while reducing the demands of new products. However, the implementation of carbon regulations has negative impacts on the manufacturer’s profits. Nevertheless, the manufacturer’s profits can be improved through deliberately designed government subsidy schemes. We also demonstrate that the government has the incentive to propose such subsidy schemes because the total emissions can be reduced under well-designed regulations, but not at the cost of the manufacturer’s profits.

MSC:
90B30 Production models
91B76 Environmental economics (natural resource models, harvesting, pollution, etc.)
PDF BibTeX XML Cite
Full Text: DOI
References:
[1] Atasu, Atalay; Sarvary, Miklos; Van Wassenhove, LukN., Remanufacturing as a marketing strategy, Manag Sci, 54, 1731-1746, (2008)
[2] Atasu, Atalay; Guide, V. DanielR.; Van Wassenhove, LukN., So what if remanufacturing cannibalizes my new product sales, Calif Manag Rev, 52, 56-76, (2010)
[3] Benjaafar, Saif; Li, Yanzhi; Daskin, Mark, Carbon footprint and the management of supply chainsinsights from simple models, IEEE Trans Autom Sci Eng, 10, 99-116, (2013)
[4] Cachon, GerardP., Retail store density and the cost of greenhouse gas emissions, Manag Sci, 60, 1907-1925, (2014)
[5] Choi, Tsan-Ming, Optimal apparel supplier selection with forecast updates under carbon emission taxation scheme, Comput Oper Res, 40, 2646-2655, (2013) · Zbl 1348.90022
[6] Du, Shaofu; Zhu, Lili; Liang, Liang; Ma, Fang, Emission-dependent supply chain and environment-policy-making in the ‘cap-and-trade’ system, Energy Policy, 57, 61-67, (2013)
[7] Ferrer, Geraldo; Swaminathan, JayashankarM., Managing new and remanufactured products, Manag Sci, 52, 15-26, (2006)
[8] Geyer, R.; Van Wassenhove, L. N.; Atasu, A., The economics of remanufacturing under limited component durability and finite product life cycles, Manag Sci, 53, 88-100, (2007) · Zbl 1232.90179
[9] Gong, Xiting; Chao, Xiuli, Optimal control policy for capacitated inventory systems with remanufacturing, Oper Res, 61, 603-611, (2013) · Zbl 1273.90009
[10] Guide, V. DanielR.; Teunter, RuudH.; Van Wassenhove, LukN., Matching demand and supply to maximize profits from remanufacturing, Manuf Serv Oper Manag, 5, 303-316, (2003)
[11] Jira, Chonnikarn; Toffel, MichaelW., Engaging supply chains in climate change, Manuf Serv Oper Manag, 15, 559-577, (2013)
[12] Kiesmüller, GudrunP., A new approach for controlling a hybrid stochastic manufacturing/remanufacturing system with inventories and different leadtimes, Eur J Oper Res, 147, 62-71, (2003) · Zbl 1011.90006
[13] Kim, Jungkeun; Rao, RaghunathSingh; Kim, Kyeongheui; Rao, AkshayR., More or lessa model and empirical evidence on preferences for under-and overpayment in trade-in transactions, J Mark Res, 48, 157-171, (2011)
[14] Kroes, James; Subramanian, Ravi; Subramanyam, Ramanath, Operational compliance levers, environmental performance, and firm performance under cap and trade regulation, Manuf Serv Oper Manag, 14, 186-201, (2012)
[15] Liu, Sidong; Chevallier, Julien; Zhu, Bangzhu, Self-scheduling of a power generating companycarbon tax considerations, Comput Oper Res, 66, 384-392, (2016) · Zbl 1349.91201
[16] Zheng Liu. Apple’s China recycling program starts with Foxconn. 〈http://m.chinadaily.com.cn/en/2015-04/02/content_19983906.htm〉; 2015.
[17] Mazuma. 〈http://www.mazumamobile.com〉; 2015.
[18] Metcalf Gilbert, E., Designing a carbon tax to reduce U.S. greenhouse gas emissions, Rev Environ Econ Policy, 3, 63-83, (2009)
[19] Metcalf, GillbertE.; Weisbach, David, Design of a carbon tax, Harv. Environ. Law Rev., 33, 499, (2009)
[20] Ministry of Finance, British Columbia, Canada. Carbon tax. 〈http://www.fin.gov.bc.ca/tbs/tp/climate/carbon_tax.htm〉; 2015.
[21] Mitra, Subrata, Revenue management for remanufactured products, Omega, 35, 553-562, (2007)
[22] Okada, EricaMina, Trade-ins, mental accounting, and product replacement decisions, J Consum Res, 27, 433-446, (2001)
[23] Ovchinnikov, Anton, Revenue and cost management for remanufactured products, Prod Oper Manag, 20, 824-840, (2011)
[24] Rao, RaghunathSingh; Narasimhan, Om; John, George, Understanding the role of trade-ins in durable goods marketstheory and evidence, Mark Sci, 28, 950-967, (2009)
[25] Ray, Saibal; Boyaci, Tamer; Aras, Necati, Optimal prices and trade-in rebates for durable, remanufacturable products, Manuf Serv Oper Manag, 7, 208-228, (2005)
[26] Subramanian, Ravi; Gupta, Sudheer; Talbot, Brian, Compliance strategies under permits for emissions, Prod Oper Manag, 16, 763-779, (2007)
[27] SBS News. Factbox: Carbon taxes around the world. 〈http://www.sbs.com.au/news/article/2013/10/29/factbox-carbon-taxes-around-world〉; 2013.
[28] Tang, ChristopherS.; Zhou, Sean, Research advances in environmentally and socially sustainable operations, Eur J Oper Res, 223, 585-594, (2012)
[29] Wu, Cheng-Han, OEM product design in a price competition with remanufactured product, Omega, 41, 287-298, (2013)
This reference list is based on information provided by the publisher or from digital mathematics libraries. Its items are heuristically matched to zbMATH identifiers and may contain data conversion errors. It attempts to reflect the references listed in the original paper as accurately as possible without claiming the completeness or perfect precision of the matching.