Remanufactured Products Research Articles

Should OEMs Outsource Remanufacturing to Retailers?

In recent times, sustainability has become more important for businesses. Accordingly, product remanufacturing has emerged as an interesting topic, as it is generally considered as a profitable and environmentally friendly end-of-use management option for several products. While extant literature on remanufacturing has comprehensively studied the topic of outsourcing, it has failed to recognize that retailers also have the flexibility to engage in remanufacturing. However, in recent years, several brand name retailers have established remanufacturing operations. The following question arises: Should original equipment manufacturers (OEMs) outsource their remanufacturing operations to their retailers? To answer this question, two models are developed in which an OEM interacts with an independent retailer on remanufacturing operations with the option to either remanufacture all products in-house (Model M) or outsource remanufacturing to their retailer (Model R). The result shows that although model M potentially facilitates greater economic, social, and environmental sustainability, it has costs for the retailer. Finally, a revenue-sharing contract is proposed to achieve a “win-win-win” outcome that has economic, social, and environmental benefits for all parties.

Role of remanufacturing in product development and related profit estimation

Companies are preferring a sustainable production system that meets the rigorous environmental regulations and fulfills the demands of customers with a qualitative product. The design for remanufacturing (DfRem) is one favorable strategy that facilitates protecting the latent energy and power in salvaged products/components. This paper presents a mathematical model, which describes DfRem as an integral process in developing a new product under three different scenarios as: i) when only new components are used, ii) when a mix of old and new spare part is used, and iii) when only old components are considered. The paper defines a strategy in choosing the core acquisition mathematically that follows an exponential or delayed S-shaped distribution along with the cost model formulations. Using the non-linear optimization modeling, the proposed framework has been validated on the sales data related to products which belong to altered industries such as automobile, telecommunication, and electronics. Results have shown that a product developed using the combination of old and new components is better as compared to using all new components or all old components. Sensitivity analysis has been carried out to examine the impact of the various parameters on the decision variables. The significance of this study is to provide a solution of procuring components in different manners and producing remanufacturable products using either new or used (old) components to the manufacturers.

An integrated contract for coordinating a three-stage green forward and reverse supply chain under fairness concerns

Today’s competitive business environment implies the integration of industrial and environmental policies leading to greener supply chains. This paper considers an integrated three-stage forward and reverse supply chain, which provides new and remanufactured green products to a green conscious market. Both the manufacturer and the remanufacturer invest on green manufacturing processes. Our research problem is the coordination of this integrated green supply chain through contracts. We develop an integrated two-part tariff contract so that all supply chain members act rationally according to the centralized solution. Along with its coordination ability, we also develop a mathematical model to determine the contract parameters so that the contract is fair and each supply chain member benefits from the contract almost evenly. The results denote that as the consumers become more sensitive to the greening levels of new and remanufactured products, the manufacturer and the remanufacturer determine higher greening levels; also the demands for both types of green products increase; and the overall supply chain earns more profit. As more green products are sold, collector becomes more sufficient to collect used products from the market, which also increases the remanufacturer’s greening level, the demand for remanufactured products, and the profit of the overall supply chain. Thus, a greening initiative has a positive impact on the others; and this leads to a more successful supply chain both in environmental and economic dimensions.

Technological paradigm-based construction and demolition waste supply chain optimization with carbon policy

The shortage of landfill space and the environmental pollution from urbanization and industrialization have led to an increase in the recycling and reuse of construction and demolition waste (CDW). Based on the technological paradigm, this paper proposes a closed-loop supply chain (CLSC) that integrates forward and reverse logistics and has multiple centers that regulate end-of-life CDW recycling and promote new product remanufacturing. Carbon price (CP) and carbon trading (CT) policies are then innovatively applied to manage the proposed supply chain, incentivize technological CDW disposal improvements, encourage policy adherence, and ensure that the economic and environmental benefits are built into the proposed CLSC. A mixed integer nonlinear programming model (MINLP) is developed to optimize the proposed CLSC by minimizing the total costs under the two carbon policies, and a real case study from China is given. Scenario analyses under the two carbon polices and practical policy suggestions are given, and comprehensive conclusions are provided in the conclusions. It was found that with the adjustment of recycling ratio, the proposed CDW CLSC was able to minimize total costs and overall carbon emissions. Moreover, the CP policy could improve the CDW recycling ratio from 19.4% to 85.3% and reduced carbon emissions by 6393 tonnes, and the CT policy should be an incentive policy to further encourage a higher recycling ratio and lower carbon emissions.

Research on green closed-loop supply chain with the consideration of double subsidy in e-commerce environment

Issues such as shortage of resources, degradation of environment, enhancement of consumers’ environmental awareness and their preference for green products, continuous improvement of environmental protection laws and regulations of government, together with increasing competition among enterprises, make the construction of green supply chain, such as production, recycling and remanufacturing of environment-friendly products particularly important. However, there are still many constraints for enterprises to effectively implement green supply chain management, such as lack of research and development (R&D) funds and technical capacity. Moreover, government is also eager to know how to formulate effective financial subsidy policies to encourage manufacturers to actively build green supply chain. In the context of above issues, the maximum total profit model of green closed-loop supply chain system is constructed under the consideration of online and offline sales modes and consumers’ green preference in this paper. Considering excessive computational time required when solving this non-linear optimization task with mixed continuous/integer variables via traditional optimization methods, meta-heuristic approaches, Genetic Algorithm (GA) and Particle Swarm Optimization (PSO) are adopted to try to find and compare calculating example’s approximate optimal solution. The calculating results indicated that enterprises could arrange the ratio of manufacturing and remanufacturing lots properly to achieve system optimal outcome; and government could adopt a suitable subsidy policy to encourage recycling and remanufacturing of used products. Sensitivity analysis of green degree of the recycled products proved that government could adopt the second subsidy strategy for low-green products to further promote the recycling and remanufacturing of enterprises. This research provides theoretical foundation for initiating reasonable government subsidy policy, formulating practical production and operation plan of enterprises as well as maximizing profits in E-commerce environment.

Environmentally responsible closed-loop supply chain models with outsourcing and authorization options

Remanufacturing is a common production mode for firms taking part in sustainable operations and the circular economy because it can improve environmental performance, especially via third-party remanufacturing. This paper studies third-party remanufacturing by developing game models for a closed-loop supply chain with one manufacturer and one third-party remanufacturer. Here the manufacturer has two strategies for third-party remanufacturing: outsourcing and authorization. The third-party remanufacturer collects end-of-life products to produce remanufactured products. Unlike the extant literature, this paper takes environmentally responsible behaviors of consumers and firms into consideration and focuses on how green consumption behavior and environmentally responsible behavior affect the manufacturer’s strategy. It finds that when a large gap exists between green consumer preferences for new and remanufactured products, both the manufacturer and the third-party remanufacturer prefer authorization; otherwise, they prefer outsourcing. In addition, it is difficult for them to select the same strategy for third-party remanufacturing when the environmental cost (the cost of not collecting end-of-life products) is high. However, they can reach an agreement in outsourcing scenario in the case of sequentially identical game.

An intelligent design for remanufacturing method based on vector space model and case-based reasoning

Design for Remanufacturing (DfRem) plays an important role in remanufacturing, which promotes the product remanufacturability, and enhance the efficiency of remanufacturing processes. However, due to the large and fuzzy demand data, it is difficult to accurately extract DfRem targets from the customer demand data. Moreover, the process of DfRem scheme generation includes conceptual design, general design and detailed design. The remanufacturability of products needs be considered at the design process, which makes the DfRem scheme solution process very complicated. For the purpose of accurately extracting DfRem targets and shortening design cycle, it is necessary to apply intelligent technology for customer demand analysis and DfRem solution. To address this, an intelligent DfRem method based on vector space model (VSM) and case-based reasoning (CBR) is proposed. Firstly, for accurate extraction of DfRem targets, VSM is employed to extract customer demand data features from the mass customer demand data embedded with remanufacturing information, and K-means technique is applied to classify customer demand data features thus to extract DfRem targets. After extraction of DfRem targets, CBR is utilized to retrieve the case that is most similar to the DfRem targets from DfRem and remanufacturing process knowledge bases. In order to improve the accuracy of the retrieval, ontology is used to construct standard knowledge expression. Finally, this method has been evaluated utilizing the DfRem of clutch remanufacturing as case studies. The results show that the method can accurately generate design scheme to satisfy the customer demands. In this paper, the intelligent DfRem method has been developed by Visual Studio and Microsoft SQL Server, which can quickly generate the most suitable solution.

Impact of Trade-In Remanufacturing Policy and Consumer Behavior on Remanufacturer Decisions

To develop more competitive strategies for different types of remanufacturing companies under the trade-in remanufacturing policy, this paper investigates the impact of the trade-in remanufacturing policy and consumer choice behavior on decisions of a traditional brand remanufacturer and a third-party brand remanufacturer by using a consumer utility model. The results suggest that the trade-in remanufacturing policy increases demand for the third-party brand, but does not increase demand for the traditional brand. Further, although trade-in remanufacturing policy increases both brand prices, it also increases consumer surplus and corporate profits. Neither the traditional brand remanufacturer nor the third-party brand remanufacturer can completely monopolize the remanufacturing market. In this situation, the traditional brand remanufacturer should strive to increase consumer loyalty, and the third-party brand remanufacturer should strive for consumer recognition of third-party remanufactured products.

Should firms provide online return service for remanufactured products?

As Information and Communication Technologies (ICT) grows rapidly, firms are increasingly selling remanufactured products online. To investigate optimal online return policy for remanufactured products, our paper considers a firm selling new and remanufactured products online in the carbon tax policy context, and two cases are investigated, i.e., not provide online return services for remanufactured products (NR) and provide online return services for remanufactured products (YR). By developing several basic theoretical models, we find that the firm should choose YR when unit salvage value of returned new product is relatively low; otherwise, the firm should choose NR. Furthermore, if consumers have a strong satisfaction for new product, YR is not beneficial to consumers. Interestingly, if emissions intensity of remanufactured products isn’t small, YR compared with NR couldn’t curb carbon emissions. At last, we also consider a supply chain with a manufacture and a retailer and supply chain coordination issues, and discover that a two-part tariff contract could coordinate the supply chain whereas return cost sharing contract is invalid.

Selection of best buyback strategy for original equipment manufacturer and independent remanufacturer – game theoretic approach

ABSTRACT The study considers two supply chain members, an original equipment manufacturer (OEM) producing new and remanufactured products and an independent remanufacturer (IR) collecting used products of OEM and producing remanufactured products. Furthermore, OEM and IR are involved in competition to collect the used products by providing various exciting offers to the customers. A two period analytical model is developed to investigate the profitable buyback strategy for OEM and IR under low and high pricing strategy. In first period, OEM performs remanufacturing and considers a strategy to collect the product cores from end users under a certain pricing strategy. Under extensive game format, IR joins in the remanufacturing business to compete with OEM and based on OEM's attractive buyback strategy, IR adopts a profitable pricing strategy. The research addresses oligopoly market where OEM is not the single seller of new product and other sellers are interested in remanufacturing. In such scenario, OEM has less control over used products collection of other brand and OEM cannot restrict independent remanufacturer to venture within remanufacturing business. The findings of the study depicted that low pricing strategy “exchange offer” is profitable buyback decision for OEM and “incentive offer” is profitable buyback decision for independent remanufacturer.

Distribution Channel Choice and Divisional Conflict in Remanufacturing Operations

We consider a firm consisting of two divisions, one responsible for designing and manufacturing new products and the other responsible for remanufacturing operations. The firm will sell these new and remanufactured products either directly to the consumer (direct selling) or through an independent retailer (indirect selling). Our study demonstrates that a firm’s organizational structure can affect its marketing decisions. Specifically, a decentralized firm with separate manufacturing and remanufacturing divisions can benefit from indirect selling with higher firm profit, supply chain profit, and total consumer demand than direct selling. Moreover, this structure also induces a remanufacturable product design. In contrast, a centralized firm in which the manufacturing and remanufacturing divisions are consolidated is intuitively better off by choosing direct selling than indirect selling. Furthermore, we show that, surprisingly, when the focal firm sells through an independent retailer, a decentralized internal structure can result in higher supply chain profit than a centralized internal structure. We further investigate the case of dual dedicated channels and conclude that, while direct selling of remanufactured products and indirect selling of new products can better induce a remanufacturable product design and higher supply chain profit, it is not in the best interest of the firm in terms of total sales and firm profit.

A joint analysis of environmental and economic performances of closed-loop supply chains under carbon tax regulation

Under carbon tax regulation, we jointly measure the environmental and economic performances of three closed-loop supply chains, where remanufacturing is implemented through the reverse channels of retailer collection, manufacture collection, and a third-party collection. The equilibrium results for each supply chain are derived and the impacts of emission-related factors are characterized. Through numerical study, we explore the impacts of the emission intensities of both new and remanufactured products on the entire emissions. Also, the government’s policy concerning environmental protection is discussed. The results show that the collection rate and the first-period product quantity are piecewise monotonous related to the tax price and emission intensities. Either the manufacturer collection or the retailer collection can be the most eco-efficient revers channel while the third-party collection is the least-preferred. The retailer collection can be both environmentally and economically better off to achieve a Pareto-improvement. Otherwise, when the manufacturer collection is the most eco-efficient reverse channel, it can be motivated by the government through subsidizing. Interestingly, the numerical studies show that reducing the emission intensity of remanufactured products can be eco-efficient, while lowering the emission intensity of new products may do harm to the environment. Besides, with one subsidy, two tax prices can be set by the government, among which the higher tax price leads to better environmental sustainability.

Multi objective Fuzzy programming of remanufactured green perishable products using supply contracts

ABSTRACT In the recent times, remanufacturing and recycling processes have been widespread because of hard environmental legislations. The significance of green factors such as uncertainty of return rates in supply networks has been extensively acknowledged in presented studies. A revenue sharing contract improves the performance of green supply chain and has a significant role in the profitability of total supply chain. There are few quantitative studies on revenue sharing contract in green supply chains. In this study, we propose coordination subject matters of a green supply chain with recycling perishable goods, involving suppliers, manufacturers, retailers, together with collection and disposal centers, in a multi-product, multi-period and multi-level basis under Fuzzy conditions. The consequences indicate that in dairy industries, appropriate collected returned products could be used as raw material for another product, which increases the supply chain profits and reduces waste; and also, since perishable goods have a limited shelf life, they can be reusable if they are collected before reaching to a critical time. Furthermore, the proposed revenue sharing contract can share benefits between supply network members and gain coordination of channel.

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

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.

The impact of a substitution policy on the bullwhip effect in a closed loop supply chain with remanufacturing

Remanufacturing is a process that usually result in a used product being as good as new. However, not all customers view remanufactured products as similar to new products. Some customers perceive remanufactured products to be inferior in terms of quality compared to new products. In such cases, there is usually a segmentation of markets for new and remanufactured products. This paper focused on the impact of having segmented markets for new and remanufactured products. By developing systems dynamics models, the paper investigated the impact of having a downward substitution policy between new and remanufactured products on the Bullwhip effect in a closed-loop system that permits not only end of life returns but also returns between supply chain players. The findings of this research suggest that, splitting the market in the presence of other returns increased the Bullwhip effect. An interesting finding was that introducing a downward substitution to a split market reduced the Bullwhip effect but not to the level it was before the market was split. The findings of this paper provided some useful managerial insights on the remanufacturing and supply chain dynamics as measured by the Bullwhip effect.

Trade-in for remanufactured products: Pricing with double reference effects

When organizations introduce programs to trade in old products for remanufactured ones to promote remanufacturing, they offer two options to consumers: buying new products or trading in for remanufactured products, where the latter is a new practice. While most of the extant literature considers only the single reference price effect, there are quality differences in the problem of trading in for remanufactured products. Thus, the reference quality effect cannot be overlooked as before. To handle this new setting, we consider consumers’ double reference effects to examine a manufacturer selling both new and remanufactured products. We also consider the remanufacturing subsidy and the consumer rebate ratio. We analyze five models and develop equilibrium solutions thereof to understand the impacts of double reference parameters and government incentives on pricing strategies, the manufacturer’s profits, and the consumer surplus. Computational examples reveal that (i) both the manufacturer’s profits and the consumer surplus benefit from the double reference effects when the reference price parameter is relatively larger and the reference quality parameter is relatively smaller; (ii) the remanufacturing subsidy is beneficial to the manufacturer, and the consumer rebate ratio only impacts and improves the retail prices of remanufactured products, but does not change the profits of the manufacturer; (iii) when the customers only consider reference price effect, lower unit remanufacturing cost, higher remanufacturing rates, and lower consumers’ discount rates for remanufactured products benefit the manufacturer. Surprisingly, when only the reference quality effect behavior is considered, higher unit remanufacturing cost, lower remanufacturing rates, and higher customers’ discount rates can offset some of the negative impacts of reference quality effects.

An optimal EoL time point prediction method for mechanical product remanufacturing based on LCA and LCC

ABSTRACT Remanufacturing is a product recovery strategy resulting in end-of-life (EoL) products being returned to recondition and equivalent to or better than the original. At present, the method of EoL time point determination for product remanufacturing is not available in considering the factors of life cycle energy and cost consumptions. This study proposes an optimal prediction method of EoL time point for product remanufacturing based on life cycle assessment and life cycle cost. First, life cycle assessment and life cycle cost theories are applied to analyze the life cycle energy and cost consumptions. Second, data regression fitting of life cycle energy and cost consumption is applied to obtain the functions of annual energy and cost consumption. Finally, a multi-objective optimization method is used to process the bi-objective functions, and the optimal EoL time point for product remanufacturing is determined. The proposed method is applied to a scroll compressor and obtained an optimal EoL time point for remanufacturing of 7.88 years.

Less is more: Consumer education in a closed-loop supply chain with remanufacturing

Different stakeholders are educating consumers about the benefits of remanufacturing. By increasing the number of consumers who are willing to purchase remanufactured products, consumer education has been expected to facilitate the advancement of the remanufacturing sector. We formally validate the condition under which consumer education is indeed beneficial from a social planner's perspective. We develop a game-theoretical model to examine the implications of consumer education upon a closed-loop supply chain consisting of one manufacturer and one supplier. The manufacturer can perform remanufacturing at the component level. The direct effect of consumer education is that more consumers are willing to pay for the remanufactured product. Although the optimal remanufactured product quantity, in general, increases in the presence of consumer education, surprisingly, our analysis identifies a consumer education paradox, that is, as more consumers are willing to pay for the remanufactured product, the manufacturer switches the choice from remanufacturing to no remanufacturing. Moreover, consumer education could be detrimental to the supply chain, consumers, and the environment because of the paradox. Fortunately, temperate consumer education might be all-around desirable if and only if ex-ante few consumers are willing to purchase remanufactured products; that is, from the social planner's perspective, temperate consumer education should be conducted to foster the remanufacturing sector in its infancy.

Analyzing the Effect of Government Subsidy on the Development of the Remanufacturing Industry.

Remanufacturing plays an important role in a circular economy, by shifting supply chains from linear to closed loop. However, the development of the remanufacturing industry faces many challenges. Consumers’ uncertainty about the quality of remanufactured products can hamper their decision to make a purchase (i.e., uncertainty behavior). Such uncertainty can be reduced when they learn that more consumers are purchasing remanufactured products (i.e., network externality behavior). Considering the aforementioned behaviors, this paper investigates how a government could set the optimal subsidy level to maximize the sales quantity of remanufactured products with a limited budget. We modeled a Stackelberg game between the government and an original equipment manufacturer, under two settings, over two periods. Setting 1 only considers an original equipment manufacturer that produces remanufactured products, and Setting 2 considers an original equipment manufacturer that produces both new and remanufactured products. We show that the original equipment manufacturer should adjust its pricing strategy (i.e., markup vs. markdown) according to the subsidy levels. Our analysis on the government budget constraint shows that an original equipment manufacturer earns more profits in Setting 1 than Setting 2, only when the budget constraint is high, and less profits when budget constraint is low.

Optimal decisions and distribution channel choice of closed-loop supply chain when e-retailer offers online marketplace

We study a closed-loop supply chain involving e-retailer’s online marketplace (i.e., platform service) and self-run shop, which are available options for upstream manufacturer to market new and remanufactured products. Considering the platform fee and the order fulfilment cost, we investigate four distribution channel modes, and obtain decision regions and corresponding optimal decisions for supply chain members. Furthermore, based on theoretical and numerical analyses, impacts of the platform fee and the order fulfilment cost on optimal decisions and performance of the supply chain are investigated. Our results indicate that the two parameters show different impacts on supply chain decisions under different channel modes. We also find that the preferred channel mode changes with the two parameters from the perspective of the manufacturer or the e-retailer, the preferred channel mode is only determined by the order fulfilment cost from the perspective of consumers, and selling the new product through the e-retailer and the remanufactured product in the online marketplace is more preferred from the perspective of the environment.