EURO 2024 Copenhagen
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2343. Product recovery strategies considering competition: an analytical model

Invited abstract in session WA-23: Game theory for the circular economy, stream Circular Economy, Remanufacturing and Recycling .

Wednesday, 8:30-10:00
Room: 82 (building: 116)

Authors (first author is the speaker)

1. Song LIU
IESEG School of Management, Univ. Lille, CNRS, UMR 9221 - LEM - Lille Economie Management
2. Maud Van den Broeke
Operations and Supply Chain Management, Ieseg School of Management
3. Tanja Mlinar
IESEG School of Management, Univ. Lille, CNRS, UMR 9221 - LEM - Lille Economie Management
4. Stefan Creemers
UCLouvain

Abstract

The rapid increase in waste from used products, coupled with growing environmental awareness, has encouraged original equipment manufacturers (OEMs) to collect and properly treat these used products through recycling, remanufacturing, or hybrid recovery strategies. Concurrently, independent remanufacturers (IRs) have begun entering the market to remanufacture used products. However, the effect of such industry competition on OEM’s recovery strategies, consumer surplus and overall product returns remains unclear. In this study, we address these research questions by employing a stylised model in which an OEM faces competition from an IR, aiming to characterise optimal solutions for both parties. Our findings indicate that the entry of an IR positively influences the overall recovery of used products. Additionally, after the IR enters in the market, the OEM will be more reluctant to recover used products and less frequently opt for hybrid recovery strategies. Finally, through numerical analysis, we explore the variations in OEM’s and IR’s profits, and consumer surplus, across different scenarios.

Keywords

Status: accepted

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