A decision model for competitive remanufacturing systems considering technology licensing and product quality strategies

Abstract

Abstract Fast maturation and obsolescence of electronics have caused the accumulation of untreated Waste Electrical and Electronic Equipment (WEEE), which results in environmental issues around the globe. Accordingly, remanufacturing systems have been developed to recover or perform proper disposal of WEEE. Over the decades, remanufacturing has continuously grown and has attracted customers' interest in reprocessed products, hence, inducing the competition of the said market. For a remanufacturer to gain a competitive advantage in the market, it is necessary to optimize both operational and managerial aspects comprehensively. Therefore, this study aims to model the competition between independent remanufacturer player's (IR) supply chain systems that integrate these two aspects. First, IR's supply chain system operational decisions involving multi-period-horizon and multi-process production planning, product flow, and product purchasing and takeback will be formulated into a mixed integer linear model. Lastly, IRs' supply chain system compete with each other in a perfect-market-competition game model that considers technology licensing and product quality strategies. Results from numerical examples show that royalty licensing is the better technology licensing strategy compared to fixed-fee licensing strategy in terms of costs. In addition, selling remanufactured products, which are of higher quality, yield less profit than selling refurbished products. However, remanufactured products are less susceptible to product value depreciation and price changes over time, therefore, generating more stable income in different conditions. With the fast-paced technological development, the proposed model could address complex remanufacturing supply chain problems, offering decision-makers a tool in optimizing the remanufacturing system.