Portal de Periódicos da CAPES

Remanufacturing authorization strategies under consumer brand loyalty

2023; Elsevier BV; Volume: 388; Linguagem: Inglês

10.1016/j.jclepro.2023.136020

1879-1786

Shanshan Lv, Mengjin Guo, Cong Cheng, Dali Huang,

Supply Chain and Inventory Management

Authorization is a common strategy that original equipment manufacturers (OEMs) adopt to compete with remanufacturers. However, in a new market segment, the remanufacturing authorization strategy may encounter new options. Considering consumers with brand loyalty characteristics, we divide consumers into two categories: indifferent and brand-product-only. Furthermore, the OEM is able to cooperate with remanufacturers via two authorization strategies: unit fee and fixed fee. We developed three simultaneous game models to investigate the effect of market segmentation on optimal strategy by considering the effect of consumers' brand loyalty characteristics: unauthorized remanufacturing (Model B), authorized remanufacturing with a unit authorization fee (Model U), and authorized remanufacturing with a fixed authorization fee (Model F). Our results show that the OEM can obtain a higher profit under a fixed authorization strategy when setting up an authorization fee at a certain threshold. We also find that the optimal authorization fee is strongly impacted by the proportion of the brand-product-only segment. Interestingly, the effect is not always positive. Moreover, OEMs will reduce authorization fees rather than increase it while the product cost increases. Our study investigates new insights about the impact of different types of authorization strategies on the OEM.