Optimal Rebate Policy in a Green Product Design and Development System with Price-Sensitivity Demand

Green product design and development should be an eco-design tool for waste management throughout the design and disposal stage. Return and recycling policy plays a crucial role in a recycling system through government subsidies. To reduce raw material waste and improve energy efficiency within recycling systems, the rebate policy is proving to be a valuable tool for companies striving to achieve ambitious targets in returning used bikes on the streets. This paper contributes to investigating the role of rebate policy on a two-stage integrating optimizing model with multiple components and imperfect processes based on price-sensitivity demand. The paper aims to deepen our understanding of the role of the return policy in a profit-maximizing remanufacturing system. An algorithm analyzes optimal solutions for production and usage rebate policies to maximize the total profit per unit time. Despite inherent limitations, data from the Taiwan bike company are used to illustrate the proposed model and algorithm. Additionally, sensitivity analysis is conducted to derive valuable managerial insights.