Designing a reverse supply chain network with quality control for returned products: Strategies to mitigate free-riding effect and ensure compliance with technology licensing requirements

Abstract

For agility and cost-effectiveness, remanufacturing was highlighted as a solution to a capacity shortage for ventilators during the Covid-19 pandemic. In post-pandemic times, recycling was introduced as a solution to raw material shortcomings. However, it is recognized that implementing these reverse logistics activities creates operational challenges, including quality control of returned ventilators and product information leakage of product information in the process of passing technical information from the original equipment manufacturer (OEM)s to the reverse logistic service provider. The proposed reverse supply chain network model includes competing collection centers, third party remanufacturers (remanufactures), and recyclers investigating the case of ventilator products in three pandemic scenarios: pre-pandemic, during the pandemic, and post-pandemic. The minimum acceptable quality for remanufacturing is determined. The model is then extended with technology acquisition settings to allow remanufacturers to receive OEM licenses for accessing technical needs. The possible leakage of technical information is then considered, along with incentivizing and penalizing strategies. We found that the penalizing strategy improves the technology acquisition level at the cost of reducing the overall profit, while the incentivizing strategy can maintain the profittextcolorblacks but does not markedly improve the technology acquisition level remarkably.