Dynamic Optimal Decision Making of Innovative Products’ Remanufacturing Supply Chain

Abstract

In order to realize the recyclability of innovative product resources, we explored the optimal dynamic path of each decision variable in the remanufacturing supply chain and analyzed the impact of each decision variable on supply chain performance. Based on the Bass innovation diffusion model, we established a remanufacturing supply chain model in which a single manufacturer leads and a single retailer follows, and the retailer is responsible for recycling. The optimal wholesale price, retail price, and recovery effort path were obtained through optimal control theory. We also discussed the influence of different innovation coefficients and imitation coefficients on the overall long-term profit of each member in the supply chain, and at the same time, found the optimal market share of the product. The research results show that the larger the market innovation coefficient and the imitation coefficient are, the larger the overall long-term profit of the manufacturer and the greater the market share of the product, while the overall long-term profit of the retailer and the entire supply chain will increase first and then decrease; when the innovation coefficient and imitation coefficient are above a certain level, retailers will not enter the market. In a market with a small innovation coefficient and a large imitation coefficient, the overall long-term profits of retailers and supply chains will be higher. This study provides a theoretical basis for the decision making of the remanufacturing supply chain of innovative products in a dynamic environment, and also provides guidance for the practice of nodal enterprises in the supply chain.