Role of Environmental Legislations and Firm-Level Strategies on Product Take Back

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  • March 20, 2019
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  • Esenduran, Gokce
    • Affiliation: Kenan-Flagler Business School
Abstract
  • In the last two decades, an increasing number of companies provide take-back programs. It is therefore essential to understand the drivers and influencers of take-back strategies. In the second chapter, we examine an original equipment manufacturer (OEM) under take-back legislation that holds manufacturers financially responsible for collecting and treating products discarded by customers. We characterize the manufacturer's optimal collection and remanufacturing policies when she has in-house remanufacturing and when she faces competition from an independent remanufacturer. We show that legislation on collection levels never decreases remanufacturing levels if the OEM remanufactures; however, it might cause remanufacturing level to decrease if the third-party remanufactures. We also find that legislation creates incentives for designing environmentally-friendly products regardless of the existence of competition. Our research has also implications for policy makers. We find that in order to achieve higher remanufacturing levels policy makers might consider subsidizing third-party remanufacturers rather than imposing take-back legislations. While we consider take-back legislation that stipulates individual responsibility in the second chapter, some implementations of legislation allow manufacturers to fulfill their obligation either individually or by joining a collective scheme. In the third chapter, we explore a company's optimal strategy in complying with take-back legislations and compare the individual versus collective schemes in terms of cost effectiveness and environmental benefits they achieve. We show that which compliance scheme yields the lowest cost depends on the collection rate maintained by the government and the market shares of partner firms. Apart from legislations, there might be a number of different economic and/or marketing concerns driving product take-back. In the fourth chapter, we consider a manufacturer with a dual distribution channel, i.e. rental and sales channel, and study the profitability of buyback program, a form of product take-back motivated by the goal of managing distribution channels better. We characterize how the profitability of the buyback program changes depending on the uncertainty in demand and the terms of buyback contract. We show that committing to the buyback price at the time of initial sales always leads to lower manufacturer profits; however, it enhances a buyback program's ability in resolving channel conflicts under uncertainty.
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  • In Copyright
Advisor
  • Marucheck, Ann
  • Lu, Lauren Xiaoyuan
  • Segars, Albert H.
  • Swaminathan, Jayashankar M.
  • Kemahlioglu-Ziya, Eda
Degree
  • Doctor of Philosophy
Degree granting institution
  • University of North Carolina at Chapel Hill Graduate School
Graduation year
  • 2010
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  • This item is restricted from public view for 1 year after publication.
Date uploaded
  • April 26, 2017

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