Optimal Channel Configuration for Implementing Remanufacturing Business in a Closed-Loop Supply Chain

Abstract

This study aims to analyze the optimal channel configuration of a manufacturer in a closed-loop supply chain (CLSC) where the manufacturer is responsible to collect used products and has a competitive dual-channel in selling new and remanufactured products respectively, including through a retailer and a third-party (Model 3PR) or by itself directly and a third-party (Model 3PM) or through a retailer and by itself directly (Model MR). Considering the manufacturer-Stackelberg, it concluded that model MR is the optimal channel configuration in terms of the sales quantity of remanufactured products and model 3PR never be the optimal one. In terms of the overall sales quantity, the profit of the manufacturer and the whole CLSC, whether model 3PM or model MR is the optimal channel configuration depends on the value of the discount perception for remanufactured products, the cost saving of producing remanufactured products, and whether considering the collection process or not.