Managing New, Remanufactured and Upgraded
Products under a Coupon Recycling Environment
Xian LI1 , Jihong ZHANG1,† , Xiaosong DING1 , Xiaodong YANG1
1

International Business School
Beijing Foreign Studies University
Beijing, People’s Republic of China, 100089
†
corresponding author: zhangjihong@bfsu.edu.cn
Abstract—We consider a two-period production and pricing model under a coupon recycling environment, in which a monopolistic manufacturer is able to produce and sell new, remanufactured and upgraded products simultaneously in the market. To attract consumers to return used products and promote the sale of upgraded products, the manufacturer offers coupons in the recycling process. We focus on the competition between different kinds of products and analyze the manufacturer’s optimal production and pricing strategies as well as the effect of coupons on them.
Keywords—remanufacturing; pricing strategy; cost; coupon

I.

I NTRODUCTION

With the advancing high-technology and exacerbation in global economic competition, more and more electronic products possess a very short lifespan prior to becoming outdated.
For example, electronic products including mobile phones,
MP3-players, digital cameras, tablets and laptops often have a lifespan being no more than one year. In the meanwhile, the shortage in global resources and deterioration of ecological environment makes remanufacturing a popular alternative to the sustainable development of many electronic manufacturers.
Most electronic products have the remanufacturing potential so as to receive additional revenues. Products to be remanufactured can be collected actively and deliberately by the manufacturer through the choice of remanufactured ability level or quality control, or passively with various causes such as regulatory and environmental concerns, warranty reasons,
purchase