Impact of Market Competition on Remanufacturing Investment

This article considers supply chain competition in which two symmetric manufacturers compete both the new and remanufactured products markets. To engage remanufacturing, competing must appropriately determine their remanufacturing capability design to facilitate remanufacturing. inevitably changes manufacturers’ cost structure terms of fixed variable costs. The problem is formulated as a two-stage game. Therein, first whether invest followed by determining production quantities if they decide Our analytical results reveal that equilibria associated with three scenarios invest, neither manufacturer invests, either invests can be conditionally achieved, depending on incurred developing difference between marginal costs products. Furthermore, it found despite changes, investment expand market shares outweigh cannibalization effect products, resulting higher profits. Nevertheless, may trapped prisoner's dilemma when operations. By comparing environmental impact without investment, result suggests not friendly, especially significant. Finally, subsidy policy proven benefit gaining more profits promoting development industry, but cause an unanticipated negative overall outcome environment.