Studying on the impact of government subsidies on manufacture/remanufacture based on outsourcing remanufacturing

XIA Xiqiang, CAO Yu

Systems Engineering - Theory & Practice ›› 2020, Vol. 40 ›› Issue (7) : 1780-1791.

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Systems Engineering - Theory & Practice ›› 2020, Vol. 40 ›› Issue (7) : 1780-1791. DOI: 10.12011/1000-6788-2019-0038-12

Studying on the impact of government subsidies on manufacture/remanufacture based on outsourcing remanufacturing

  • XIA Xiqiang1, CAO Yu2
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Abstract

To explore if and for whom the government should provide subsidy under the model of outsourcing remanufacturing, the game model between an original equipment manufacturer (OEM) and a remanufacturer is established for the three government subsidy strategies based on outsourcing remanufacturing. Basing on the three game models, the influence of the three government subsidy strategies on the decision of remanufacturing, consumer surplus and social surplus is analyzed. The results show that: the remanufacturer will transfer the government subsidy through raising the unit outsourcing remanufacturing cost when government subsidizing the OEM; the remanufacturer will indirectly reduce the retail prices of remanufacturing products through reducing the unit outsourcing remanufacturing cost in order to get more government subsidies when subsidizing the remanufacturer, i.e. it is more conducive to promoting the development of remanufacturing industries when subsidizing the remanufacturer; government subsidies could increase the consumer surplus and social surplus; government subsidies cannot always reduce the negative impact of the two products on the environment.

Key words

outsourcing remanufacturing / government subsidies / OEM / remanufacturer / game model

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XIA Xiqiang , CAO Yu. Studying on the impact of government subsidies on manufacture/remanufacture based on outsourcing remanufacturing. Systems Engineering - Theory & Practice, 2020, 40(7): 1780-1791 https://doi.org/10.12011/1000-6788-2019-0038-12

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Funding

National Natural Science Foundation of China (71702174, 71472021); Key Program of National Natural Science Foundation of China (71632007); Major Program of National Natural Social Science Foundation of China (13&ZD147)
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