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Dynamic pricing models for used products in remanufacturing with lost-sales and uncertain quality

  • Gendao Li
    ,
  • Yu Xiong
    ,
  • Yu Zhou
    ,
  • Kiran Fernandes
    ,
  • Richard Harrison
    ,
  • Zhongkai Xiong
  • University of Bedfordshire
    ,
  • University of East Anglia
    ,
  • Chongqing Technology and Business University
    ,
  • Chongqing University
    ,
  • Durham University
    ,
  • Queen's University Belfast
Research Output: Contribution to journal Article Peer-review

Abstract

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.

Publication Information

Output type

Research Output: Contribution to journal Article Peer-review

Original language

English

Pages from-to (Number of pages)

Pages 378-688

Journal (Volume, Issue Number)

International Journal of Production Economics (Volume 147, Issue c)

Publication milestones

  • Published - 22/04/2013

Publication status

Published - 22/04/2013

ISSN

0925-5273

External Publication IDs

  • handle.net: 10547/594046
  • Scopus: 84889882869

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