Dynamic pricing models for used products in remanufacturing with lost-sales and uncertain quality
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Affiliation
Chongqing Technology and Business UniversityJilin University
University of East Anglia
Chongqing University
University of Durham
Queen′s University Belfast
Issue Date
2013-04-22
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In this paper, we investigate the remanufacturing problem of pricing single-class used products (cores) in the face of random price-dependent returns and random demand. Specifically, we propose a dynamic pricing policy for the cores and then model the problem as a continuous-time Markov decision process. We first design a basic model that does not consider the quality uncertainty of cores, and then extend our model to incorporate this factor. Besides proving optimal policy uniqueness and establishing monotonicity results for the optimal policy, we also characterize the impact of system parameters on the optimal policies, which can provide simple managerial insights. Finally, we use computational experiments to assess the benefits of dynamic pricing compared to static pricing and identify the impacts of specific parameters on the relative merits of dynamic pricing policy.Citation
Xiong, Y. et al (2013) 'Dynamic pricing models for used products in remanufacturing with lost-sales and uncertain quality' International journal of production economics 147 (c) 378-688Publisher
ElsevierAdditional Links
http://www.sciencedirect.com/science/article/pii/S0925527313001898Type
ArticleLanguage
enISSN
0925-5273ae974a485f413a2113503eed53cd6c53
10.1016/j.ijpe.2013.04.025