Refund polices for core collecting regarding the customers’ responses
2014 (English)Manuscript (preprint) (Other academic)
To encourage the return of cores, remanufacturers in practice commonly charge a certain amount of purchasing deposit, and refund it to the customer based on the result of quality inspection in the return process. Two types of classification errors exist and interact with each other during such an inspection process: either low quality cores are defined as remanufacturable; or high quality cores are defined non-remanufacturable. A remanufacturer has to choose a combination them and determine a proper deposit value, with the consideration of customers’ possible responses concerning purchasing and return behaviors. Within a game theory framework, the analytical solutions of these issues are firstly developed under the assumption that the customer has the inspection error information. When this information is not available, the solutions are analyzed with a given and fixed deposit. The value of information transparency in inspection errors is shown by comparing these two settings. The salvage value of different cores also has a great influence on the remanufacturer’s profit. In addition, the effect of conservatively estimating customers’ product payoff and the influences of improving inspection accuracy are investigated numerically. Interestingly, the customer may return more low quality cores when the inspection accuracy is improved.
Place, publisher, year, edition, pages
Remanufacturing, refund policies, core quality, inspection errors, game theory
Economics and Business
IdentifiersURN: urn:nbn:se:liu:diva-113250OAI: oai:DiVA.org:liu-113250DiVA: diva2:779845