Optimal pricing and greening decisions in a supply chain when considering market segmentation

This study investigates the optimal pricing and the remanufactured product's greening decisions in a supply chain consisting of one manufacturer and one retailer. Under manufacturer-led Stackelberg games, three remanufacturing systems, namely, centralized, decentralized manufacturer, and decentralized retailer-remanufacturing, are considered. Consumers in the market are divided into normal and green consumers according to whether they consider environmental issues. We first demonstrate the conditions under which the manufacturer or retailer should engage in remanufacturing. Second, despite cannibalization, a centralized remanufacturing system exhibits higher efficiency linked with higher market coverage and leads to a higher profit compared to manufacturer/retailer decentralized alternatives. Finally, numerical studies and sensitivity analyses are used to examine the sensitivity of optimal pricing and greening decisions.