Information sharing in a closed-loop supply chain with learning effect and technology licensing

Abstract

The considerable economic and environmental benefits from remanufacturing has led growing interest in closed-loop supply chain management. Incorporating information sharing and learning effect plays a significant role in determining the efficiency and the benefit of supply chain. Therefore, this study investigates the interaction between information sharing and learning effect in a closed-loop supply chain by developing three remanufacturing modes including no-remanufacturing, original equipment manufacturer remanufacturing and third-party remanufacturer remanufacturing under technology licensing. The results demonstrate the information sharing and learning effect have a negative impact on the procurement price and procurement quantity. A higher procurement price would be achieved under information sharing scenarios compared to no information sharing scenarios when the retailer reveals a larger demand information to the manufacturer. Since the original equipment manufacturer can make more accurate pricing decisions based on the shared information, he can obtain more payoffs when he receives demand information from the retailer. Comparatively, the procurement price in third-party remanufacturer remanufacturing scenario is higher than that in original equipment manufacturer remanufacturing scenario if the learning effect factor is relatively large. Moreover, the learning effect can bring a payoff increase to the original equipment manufacturer because a higher learning effect factor can save more production cost. These results can help achieve an optimal approach of learning effect and information sharing in a closed-loop supply chain with technology licensing.