Abstract
Remanufacturing could effectively solve resource shortage and environment crisis and achieve sustainable development of the economy. The original equipment manufacturer (OEM) could not only focus on its core business (i.e., producing new products), but also get profit from remanufacturing through the intellectual property rights. Based on the authorized remanufacturing, the game model between a manufacturer and a remanufacturer was constructed. Based on the game model, the impact of authorized remanufacturing on sustainable remanufacturing is analysed, and the coordination mechanism between manufacturer and remanufacturer is given. The main results are as follows: the OEM could increase its profit and change its unfavourable market competition status by authorizing remanufacturing; a franchise contract could make the sustainability supply chain optimized; when the ratio of the environment effect is greater than a certain threshold, centralized decision-making could not only increase the supply chain revenue, but also reduce the impact on the environment.
Highlights
As third-party remanufacturers engage in remanufacturing, the emergence of remanufactured products will result in reduced sales of new products in the market and reduced profits for the original manufacturer as well, which will prompt the original manufacturer to use intellectual property protection to limit the development of the remanufacturing industry
Zhu et al [6] constructed a manufacturing/remanufacturing game model based on authorized remanufacturing to investigate the government subsidies strategy, and the results indicated that through remanufacturing, the original manufacturer could transfer remanufacturing proceeds and government subsidies
A franchise contract mainly refers to authorization by the original manufacturer to remanufacturers to remanufacture by charging a licensing fee (z) on the basis of the remanufactured product unit and to coordinate the remanufacturing supply chain, and z is generally smaller than zD, so the production cost of the remanufactured product is reduced, and the sales of the remanufactured product are promoted
Summary
In the 21st century, with rapid economic development, the world is facing an increasingly serious shortage of resources as well as environmental problems, prompting all countries to alter the existing mode of economic development and look for a sustainable mode of economic development to achieve the recycling of resources and to minimize the adverse effect of products on the environment [1]. The comparison of the effects of decentralized decision-making and centralized decision-making under authorized remanufacturing on the remanufacturing supply chain can provide a scientific basis for the original manufacturers and remanufacturers making remanufacturing decision. Wang [10] studied the optimal decision of the closed-loop supply chain under authorized remanufacturing based on the optimization model. In this study, a game model of manufacturing/remanufacturing was constructed based on authorized remanufacturing to compare the effects of decentralized decision-making and centralized decision-making on the competition and coordination mechanisms of the manufacturing/remanufacturing supply chain, to provide a scientific basis for the decision-making of original manufacturers and remanufacturers.
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