A Study on the Pricing Decision of Remanufacturing Products considering Government Subsidies in a Carbon Trading Environment

Abstract

Considering the characteristics of the carbon trading environment, the impact of government subsidies on pricing decisions of remanufacturing products is studied. First of all, four cases, including those without government subsidies, government subsidies for manufacturers’, government subsidies for retailers’, and centralized decision-making, are analyzed, respectively, and the optimal solutions of new products and remanufacturing products are obtained in four cases. Then, three cases of production subsidies, sales subsidies, and centralized decision-making are compared and analyzed, and the influences of government subsidies on wholesale prices, sales prices, and sales volume are revealed. Finally, the influences of main factors on decision variables and optimal profits are analyzed through numerical simulation, and the main conclusions are verified. The study finds that (1) under two subsidy mechanisms of production subsidies and sales subsidies, the government has the same promoting effect on the sales volume of remanufacturing products; (2) compared with government subsidies to manufacturers or retailers, in the way that manufacturers and retailers make centralized decisions on government subsidies, the sales volume of products increases, and the profits of the entire remanufacturing product supply chain system are optimized.