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Less is more: Consumer education in a closed-loop supply chain with remanufacturing

Zhou, Yu, Xiong, Yu and Jin, Minyue (2020) Less is more: Consumer education in a closed-loop supply chain with remanufacturing Omega.

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Abstract

Different stakeholders are educating consumers about the benefits of remanufacturing. By increasing the number of consumers who are willing to purchase remanufactured products, consumer education has been expected to facilitate the advancement of the remanufacturing sector. We formally validate the condition under which consumer education is indeed beneficial from a social planner's perspective. We develop a game-theoretical model to examine the implications of consumer education upon a closed-loop supply chain consisting of one manufacturer and one supplier. The manufacturer can perform remanufacturing at the component level. The direct effect of consumer education is that more consumers are willing to pay for the remanufactured product. Although the optimal remanufactured product quantity, in general, increases in the presence of consumer education, surprisingly, our analysis identifies a consumer education paradox, that is, as more consumers are willing to pay for the remanufactured product, the manufacturer switches the choice from remanufacturing to no remanufacturing. Moreover, consumer education could be detrimental to the supply chain, consumers, and the environment because of the paradox. Fortunately, temperate consumer education might be all-around desirable if and only if ex-ante few consumers are willing to purchase remanufactured products; that is, from the social planner's perspective, temperate consumer education should be conducted to foster the remanufacturing sector in its infancy.

Item Type: Article
Divisions : Faculty of Arts and Social Sciences > Surrey Business School
Authors :
NameEmailORCID
Zhou, Yu
Xiong, Yuy.xiong@surrey.ac.uk
Jin, Minyue
Date : 1 May 2020
DOI : 10.1016/j.omega.2020.102259
Copyright Disclaimer : © 2020 Elsevier Ltd. All rights reserved.
Uncontrolled Keywords : Supply chain management; Sustainable operations; Remanufacturing; Consumer education; Environmental performance;
Depositing User : James Marshall
Date Deposited : 04 Jun 2020 14:45
Last Modified : 04 Jun 2020 14:45
URI: http://epubs.surrey.ac.uk/id/eprint/857074

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