The Relationship Between Cost Structure and Market Structure in Remanufacturing System

Abstract

Abstract:

Both the ability of consumers to independently make buying decision and the cost structure determine the producing decision, and thus establish the market structure in remanufacturing system. This paper a game supply chain model, consisting of one original manufacturer and one third-party, is established to analyze how the cost structure influences producing decision, license fee, and market structure. The results indicate that the high cost of new product will compel OEM (orignal equiqment manufactuce) to give up production operation in the second stage; that simultaneous lower cost is the unique condition for hybrid market of new product and remanufactured product; that license fee is a rapier, controlling the consumer distribution between new product and remanufactured product.

Key words: remanufacturing, consumer utility, cost structure, license strategy

Li Bang-yi, Gu Rui, Li Ning, Liu Zhi. The Relationship Between Cost Structure and Market Structure in Remanufacturing System[J]. Industrial Engineering Journal .

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