Remanufacturing vs. greening: Competitiveness and harmony of sustainable strategies of supply chain under uncertain yield

Abstract

This paper explores the interaction between a risk-neutral supplier and a risk-averse manufacturer in a supply chain considering the remanufacturing of green defective products under scarce yield information. The minimax-regret criterion is adopted by the manufacturer in response to the risk of scarce the information. In order to overcome the conservatism of minimax-regret criterion, we improve the model by integrating ideal profit and minimax regret. Based on the Stackelberg game framework, it is revealed that there is competitiveness between the sustainable strategies. Furthermore, this paper analyzes the evolutionary equilibrium between the competitive strategies based on the evolutionary game theory. Different from the conclusions in existing research that some sustainable strategies can cause free-riding behavior, this paper finds that the supplier’s greening raw materials may lead to a negative effect on the manufacturer by increasing her minimax regret, while the manufacturer’s remanufacturing defective products may reduce the supplier’s profit. The evolutionary stable strategy of the improved model indicates that the supplier will always prefer to the greening strategy. However, it is interesting to find that higher remanufacturing production cost, lower actual yield, and production cost can motivate the manufacturer to implement the remanufacturing strategy. The numerical results illustrate the impact of some factors, such as greening difficulty, consumer preference, as well as the upper and lower bounds of yield on the evolution speed and direction. Moreover, the improved model has a higher possibility of achieving better performance. The results can promote the harmonious transformation of supply chain to sustainable development.