Decisions of Recovery Processing and Service for Remanufacturing Supply Chains Based on Transaction Pricing
A remanufacturing supply chain consisting of a manufacturer and a third party recycling company is investigated. The third party recycling company provides recovery processing service and some other service for the manufacturer. Firstly, a Stackelberg game model is developed for recovery processing service. The pricing, processing conversion rate, recycling effort level and some other decisions are analyzed. Later, the influence of value-added service is discussed. The results show that: higher recycling payment of the manufacturer can encourage recycling behavior of the recyclers. The manufacturers which the detachable processing level of their products is high are more willing to accept related value-added services of recyclers. The high basic payment of manufacturers is the necessary condition to motivate the recycling service behavior of the recyclers; otherwise, recyclers may get slack in the process of recycling.