Abstract
The paper investigates interactions in a two-period closed-loop supply chain consisting of a single manufacturer and a single remanufacturer. In the context of recycling and remanufacturing by the remanufacturer, the manufacturer and remanufacturer choose different production strategies. By comparing the costs, profits and equilibrium quantity of supply chain members in decentralized and centralized models, we focus on the conditions under which the remanufacturer chooses to sell the remanufactured products and compete with the manufacturer. Different cooperative strategies can affect closed-loop supply chain decision-making. The article analyzes the impact of each cost and recycling rate on the productions and profits of the manufacturer and remanufacturer, and compares the total profits of members between two models. The sensitivity analysis of the models shows that the centralized model can be an effective way of achieving greater efficiency in terms of the overall supply chain. This study provides insights into the remanufacturing theory, which might guide remanufacturing operations and strategies.
Highlights
The concept of closed-loop supply chain (CLSC) was created as a result of the growing concerns about sustainable development in the world, which incorporates design, control, and operation of a system to maximize value creation over the entire lifecycle of a product with dynamic recovery of value from different types and volumes of returns over time [1]
Management of the closed-loop supply chain is a major concern in academia
In light of recycling of products, this article develops a closed-loop supply chain consisting of original equipment manufacturers (OEMs), remanufacturer and consumer
Summary
The concept of closed-loop supply chain (CLSC) was created as a result of the growing concerns about sustainable development in the world, which incorporates design, control, and operation of a system to maximize value creation over the entire lifecycle of a product with dynamic recovery of value from different types and volumes of returns over time [1]. It is worth noting that both the manufacturer and remanufacturer pursue cooperation because the manufacturer tends to boost their corporate image and expand their market share and the remanufacturer broadens the market; sales of remanufactured products by remanufacturer do not pose a great threat to the sales of new products by OEMs. As we observe in practice, remanufactured automotive parts industry has a long-standing tradition of the third-party involvement. This article adopts quantitative methodologies, and provides decentralized and centralized models on the condition of whether manufacturers and remanufacturers cooperate or not. The remanufacturer recycling used products is the leader in the Stackelberg game
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