Sharing or reselling? How does manufacturer handle used products?

Author:

Wang Mengnan12ORCID,Zhang Juliang1ORCID,Cheng T. C. E.3

Affiliation:

1. Department of Logistics Management, School of Economics and Management Beijing Jiaotong University Beijing China

2. Inner Mongolia Modern Logistics and Supply Chain Research Centre, School of Economics and Management Inner Mongolia University of Technology Hohhot China

3. Department of Logistics and Maritime Studies The Hong Kong Polytechnic University Kowloon Hong Kong SAR

Abstract

AbstractTo encourage consumers to reuse their used products, some manufacturers launch second‐hand platforms while others adopt sharing platforms. Which platform benefits them more is an interesting problem for such manufacturers. To address this problem, we propose a two‐period model in which heterogeneous consumers decide whether to buy new products in Period 1 or to rent (buy) used products on the platform in Period 2. Under a proportional transaction fee, we show that the two platforms can benefit the manufacturer if the unit production cost is high, and the valuation difference is low or the number of high‐value consumers in Period 1 is fewer than in Period 2. Moreover, the two platforms are equivalent when the salvage value is 0. When the salvage value is positive, the second‐hand platform benefits the manufacturer more than the sharing platform. The sharing platform induces the manufacturer to set a higher sale price than the second‐hand platform when the unit production cost is high and there are fewer high‐value consumers in Period 1. Otherwise, the sale and reselling prices are higher under the second‐hand platform. We also consider the cases with a general consumer valuation distribution, multiple product life cycles, and a fixed transaction fee. Our findings can help manufacturers make the decision on platform choice to handle used products.

Funder

National Natural Science Foundation of China

Beijing Logistics Informatics Research Base

Hong Kong Polytechnic University

Publisher

Wiley

Cited by 1 articles. 订阅此论文施引文献 订阅此论文施引文献,注册后可以免费订阅5篇论文的施引文献,订阅后可以查看论文全部施引文献

1. Optimal trade-in programs for quality differentiated recycled products;Transportation Research Part E: Logistics and Transportation Review;2024-08

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