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Upgrading Strategy, Warranty Policy and Pricing Decisions for Remanufactured Products Sold with Two-Dimensional Warranty

Baghdadi, Esmat, Shafiee, Mahmood, Alkali, Babakalli (2022) Upgrading Strategy, Warranty Policy and Pricing Decisions for Remanufactured Products Sold with Two-Dimensional Warranty. Sustainability, 14 (12). pp. 1-15. ISSN 2071-1050. (doi:10.3390/su14127232) (Access to this publication is currently restricted. You may be able to access a copy if URLs are provided) (KAR id:95420)

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Abstract

The environmental sustainability and business benefits of end-of-life products have led to worldwide growth in the remanufacturing market. However, customers are often sceptical about the quality and durability of remanufactured products. To ensure a risk-free customer experience, dealers carry out some upgrading actions on the most critical components and offer a reasonable warranty period on products at the time of resale. It is crucial for dealers to consider customers’ attitudes and preferences when deciding on an upgrading strategy, warranty coverage, and sales price for remanufactured products. This paper aims to establish an equilibrium between customers’ expected costs and dealers’ expected profit for remanufactured products sold with a two-dimensional warranty and post-warranty service. In our model, customers make their decisions based on cost–benefit balance, whereas dealers make decisions that maximise their profit margin. Owing to the nature of the conflict between the dealer and customers, a Stackelberg game model is developed to optimise the upgrade strategy, warranty policy, and pricing decisions for remanufactured products. The Karush–Kuhn–Tucker (KKT) optimality condition of the lower-level problem is used to solve the model. Finally, a numerical example is provided to illustrate its applicability.

Item Type: Article
DOI/Identification number: 10.3390/su14127232
Uncontrolled keywords: Remanufacturing; End-of-life products; Upgrading; Two-dimensional Warranty; Stackelberg Game Theory; Post-warranty
Subjects: T Technology > TA Engineering (General). Civil engineering (General) > TA168 Systems engineering
T Technology > TA Engineering (General). Civil engineering (General) > TA401 Materials engineering and construction
T Technology > TJ Mechanical engineering and machinery
Divisions: Divisions > Division of Computing, Engineering and Mathematical Sciences > School of Engineering and Digital Arts
Depositing User: Mahmood Shafiee
Date Deposited: 13 Jun 2022 20:27 UTC
Last Modified: 13 Jun 2022 20:27 UTC
Resource URI: https://kar.kent.ac.uk/id/eprint/95420 (The current URI for this page, for reference purposes)
Shafiee, Mahmood: https://orcid.org/0000-0002-6122-5719
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