Decision-Making and Coordination of Remanufacturing Closed-Loop Supply Chain with PIR under the Different Government Subsidy Strategies

Abstract

Government subsidies and process innovation for remanufacturing (PIR) have become effective measures to improve the recycling and remanufacturing efficiency of waste products and promote sustainable economic development. Under different government subsidy strategies, the PIR decision and coordination of the closed-loop supply chain (CLSC) of authorized competition remanufacturing are studied. This paper constructs five centralized and decentralized decision models of CLSC and analyzes the influence of government subsidy strategy and PIR input entity differences on the competition and cooperation relationship between manufacturers and remanufacturers and the performance of CLSC. A fixed license fee contract is designed to realize CLSC coordination and to improve the performance and operational efficiency of the CLSC. It is found that patent licensing fees can always play a role in sharing government subsidies between the manufacturer and remanufacturer, and making changes in government subsidy strategies only affects formulation of patent licensing fees. Manufacturer PIR input mode is more conducive to improving the market demand for new products, while remanufacturer PIR input mode is more conducive to improving the PIR input level, remanufactured product market demand, CLSC members and overall performance. Moreover, government subsidies can produce better efficiency and effects under remanufacturer PIR input mode. A fixed license fee contract can coordinate a CLSC effectively. The increase in government subsidies and PIR input effect can effectively expand the negotiation space between the manufacturer and remanufacturer, which is conducive to achievement of coordination contracts. Finally, the main conclusions are verified by numerical analysis.