Remanufacturing Supply Chains Research Articles

Impacts of reference price effect and corporate social responsibility on the pricing strategy of a remanufacturing supply chain

Consumers' reference price effects (RPE) impact market pricing transactions and play a vital role in enterprise pricing decisions. Meanwhile, due to consumers' widespread concern about environmental and ecological issues, more enterprises are taking part in the activity of corporate social responsibility (CSR). Motivated by CSR practices, we examine social work donations (SWD) as a CSR activity. Given practical complexities, we used the profit maximization principle and game theory to focus on a two-echelon supply chain consisting of one manufacturer and one retailer taking part in CSR activity under RPE, where the manufacturer takes part in SWD as CSR practice and collects used products from customers. Five models are developed to investigate the influence of reference price and CSR on remanufacturing supply chain decisions; in specific, the high parameter of reference price benefits the supply chain members' profits, but too high of investment efforts in CSR might hurt the supply chain members. In addition, under the decentralized system, giving appropriate government subsidies can reduce profit losses when RPE exists. Finally, we propose a two-part tariff (TPT) contract to coordinate the decentralized CSR remanufacturing supply chain. Our research can be directly applied to remanufacturing supply chains under RPE in CSR environments.

Pricing and coordination of remanufacturing supply chain considering remanufacturing capacity and preferences under government mechanisms

The management of recycling and remanufacturing supply chains, which can help enterprises achieve low pollution, low energy consumption and sustainable development, has become a new strategy of modern enterprises. The factors of supply chain and government mechanisms will have an impact on enterprise decisions for recycling, remanufacturing and social welfare. In order to promote the sustainable operation of the supply chain, considering the coordination role of government mechanisms and supply chain, a recycling and remanufacturing supply chain model composed of a manufacturer, retailer and recycler is constructed. This paper discusses the pricing decision of new/remanufactured products, supply chain performance level, such as remanufacturing effort, publicity service efforts and profit, and social welfare in five models of three situations: centralized situation, including non-government mechanisms and non-supply chain coordination; manufacturer-led situation, including non-government mechanisms and non-supply chain coordination, government mechanisms and non-supply chain coordination, government mechanisms and supply chain coordination; government-led situation, including government mechanisms and non-supply chain coordination. It is found that under manufacturer-led situations, the government subsidy and bonus-penalty mechanisms can encourage manufacturer and retailer to actively participate in the recycling and remanufacturing activities. The supply chain coordination contract can further enhance the role of the consumer market and promote the implementation of government mechanisms. Manufacturer adopts a cost-sharing contract to encourage recyclers to carry out recycling activities. Under certain conditions, the contract can effectively improve the benefits and social welfare. The research conclusions have important theoretical and practical application value for the coordination and cooperation among enterprises in the supply chain and the formulation of government mechanisms.

Responsibility disengagement or sharing? Cooperative fulfilling mechanism of solid waste management in the remanufacturing supply chain.

Due to limited resources and meager profits, collectors have insufficient motivation to fulfill their responsibilities, resulting in severe secondary pollution in the recycling process. Therefore, it is necessary to focus on the interests of collectors to motivate them to fulfill their solid waste management (SWM) responsibilities better. This paper focuses on remanufacturers' altruistic behavior in the context of collectors' compliance. Based on the Stackelberg game method, this paper constructs decision-making models for remanufacturers concerned or not concerned about the interests of collectors and compares the optimal decision-making outcomes of each model. The study finds that (1) based on remanufacturers' altruistic concerns, a coordination mechanism for sharing responsibility-fulfilling costs for collectors can motivate them to fulfill their responsibilities and improve the performance of the remanufacturing supply chain. (2) The proportion of the remanufacturer's share of the responsibility cost for the collector should not be too low, which is not conducive to encouraging the collector to fulfill the responsibility. However, the sharing proportion should not be too high, as this will increase the burden on the remanufacturer. This paper demonstrates the applicability of remanufacturers to moderately share responsibility costs for collectors to incentivize collectors to fulfill their responsibilities. The findings bridge the gap in research on SWM in remanufacturing supply chains. The management insights from this paper are expected to help remanufacturing supply chain companies establish a reuse behavior model that addresses the challenges that SWM faces to improve remanufacturing supply chain performance.

Outsourcing decision-making in global remanufacturing supply chains: The impact of tax and tariff regulations

In contemporary international remanufacturing supply chains, whether an original equipment manufacturer (OEM) engages in remanufacturing operations or outsources to a third-party remanufacturer (TPR) is influenced by tax and tariff regulations. This study develops a two-stage game model for the decision-making of an OEM from an exporting country showing that the optimal remanufacturing model is significantly affected by the tax and tariff regulations of the importing country and more particularly, the difference between sales tax on remanufactured products and the unit product import tariffs on new products. The model selections for the OEM and the importing country align when this difference is close to zero. This paper is one of the few examining the impact of tax and tariff regulations on outsourcing decisions in remanufacturing contexts, which is largely neglected in the extant literature but has become increasingly important, especially with recent development trends of deglobalization (e.g., Brexit, the US–China trade war, and various sanctions). The significance of this study is threefold: the work makes novel theoretical contributions to the decision-making game model with tax and tariff constructs taken into consideration, has practical implementations for optimizing the strategic business deployment of OEMs, and has implications for consideration of policy and social welfare by policy makers of the destination country.

Tunneling the barriers of blockchain technology in remanufacturing for achieving sustainable development goals: A circular manufacturing perspective

AbstractAs a concern with manufacturing industries, circular economy (CE) practices—often labeled “circular manufacturing (CM)”—are industrial tasks through which several circular economy principles have been integrated. Among these circular manufacturing strategies, “3R” (recycle, refurbish/remanufacture, and reuse/redistribute) is the key strategy that assists the manufacturing industry with closing the loop for sustainability. An effective inclusion and management of 3R lead a firm to a greater likelihood of successfully integrating CE and CM. In recent years, remanufacturing has gained greater prominence, especially with the emergence of technology, including cyber‐physical systems. These technologies assist the remanufacturing firm with efficient take‐back systems through tracking. However, data transferred through these technologies among value chain partners in remanufacturing are not reliable. Due to the lack of trust and transparency, value chain partners are hesitant to participate in remanufacturing supply chains. To address the limitation of technologies in remanufacturing, blockchain has been introduced to secure the data. Despite the advantages of blockchain technology, practitioners face difficulties in integrating these blockchain technologies into the remanufacturing context. Several earlier studies addressed the challenges of implementing blockchain, but no earlier studies have specifically examined remanufacturing industries, which are entirely different from forward supply chain industries. Concerning the fact, this study identifies the barriers that exist with the implementation of blockchain technology in the application of the remanufacturing sector. A framework has been proposed and validated in a Danish automotive parts remanufacturing company. Multi‐criteria decision‐making method has been used to identify the effective and most influential barriers among common barriers. Results reveal that “scaling of technology” (B6) is the key barrier of BCT implementation in remanufacturing context. This study concludes with useful discussions based on the results along with the recommendations to eradicate those influential barriers and their respective impacts on SDGs (SDG4, SDG8, SDG9, and SDG17). Finally, this study sheds light on future enhancements on the integration of blockchain technology in remanufacturing to reap several benefits of circular manufacturing.

The Elimination Effect of Take-Back Regulation on Backward Production Capacity Remanufacturing Supply Chains

With more and more end-of-life products in daily life, many companies are engaging in remanufacturing, including backward production capacity (BPC) enterprises. Meanwhile, take-back regulation always asks the manufacturer to take back end-of-life products to reduce pollution. However, the effect of take-back regulation on remanufacturers remains unclear. In this paper, we first analyzed the take-back regulation threshold with the elimination effect. We then discussed the impact on stakeholders, such as the manufacturer, the remanufacturer, consumers, and the government. A two-stage dynamic market model is proposed, which considers the market with/without BPC remanufacturer. Take-back regulation’s elimination effect is studied, and the results show that when the collection target reaches the elimination threshold, the manufacturer’s profit declines, the BPC remanufacturer is eliminated, consumer surplus decreases, and social welfare is improved. Besides, to cope with a high take-back regulation target, the manufacturer will reduce new product output, which leads to BPC remanufacturer’s benefits decline. A numerical study is given with a different collecting strategy of the BPC remanufacturer, the incentive interval, the inhibition interval, and the elimination interval of the take-back regulation for stakeholders which are described. At last, some managerial insights are given to help the regulator implement take-back regulation.

Digital twins for information-sharing in remanufacturing supply chain: A review

Information asymmetries are the main challenge restricting the development of close-loop supply chains. As a potential solution, digital twins are expected to promote this development by integrating them with dynamic information. This article analyses current research on remanufacturing supply chains and digital twins, and discusses the potential usefulness, challenges and solutions of using digital twins in remanufacturing supply chains. We conduct a systematic literature review to answer two research questions: 1) whether the information asymmetry in the current remanufacturing supply chain has been resolved; and 2) whether digital twins have a positive impact in solving problems with information asymmetries in remanufacturing supply chains. By analysing 288 articles, we find that, first, this problem remains to be solved, there being two research gaps in particular. Secondly, we find that the digital-twin applications are conducive to solving this problem. In addition, this article discusses the potential challenges to this application and proposes four future research directions. The article not only summarizes the research related to remanufacturing supply chains and digital twins theoretically, it also provides support for digital-twin applications in the remanufacturing industry.

Differential Pricing and Emission Reduction in Remanufacturing Supply Chains with Dual-Sale Channels under CCT-Mechanism

In order to make optimal decisions for pricing and emission reduction, a remanufacturing supply chain system with dual-sale channels is investigated. With regard to the preferences of consumers for different channels and carbon cap-and-trade mechanisms, profit-maximization models are developed on supply chain members and systems in decentralized and centralized cases. Based on a backward induction, the corresponding formulae for decision variables are obtained. Then the effect of the industry emission control coefficient is analyzed and the optimal decisions of two cases are compared. Finally, the coordination mechanism and numerical analysis are presented. The result indicates that: (1) As the free carbon allowances granted by the government to the manufacturer increases, the investment in carbon reduction from the manufacturer will increase. As the industry emission control coefficient increases, the carbon emissions per product and the prices of new and remanufactured products will decrease, while the demands of the new and remanufactured products and the profits of supply chain members and systems will increase. (2) As the direct sale channel preference coefficient increases, the profits of the manufacturer and the system will increase while the retailer’s profit will decrease. Correspondingly, the carbon emissions of unit product will decrease, and the sales of the direct sale channel will increase while the sales of the retail channel will decrease. (3) The decision in the coordinated case not only ensures emission reduction and system profit to reach the level of the centralized case, but also raises the profits of supply chain members in the decentralized case. Therefore, it is preferable to other decisions. (4) As the carbon trading price increases, the emission reduction investment from the manufacturer will increase while the profits of the supply chain and its members will increase.

CSR Remanufacturing Supply Chains under WTP Differentiation

With the shortage of global resources and the call for sustainable development, the remanufacturing supply chain and the corporate social responsibility of enterprises have attracted extensive attention from scholars. This paper studies a manufacturer-retailer corporate social responsibility (CSR) remanufacturing supply chain in which the manufacturer collects the used products grounded in the willingness to pay (WTP) differentiation. Different from previous literature, this paper first adds WTP differences to the CSR remanufacturing supply chain. Next, we analyze the manufacturer exhibiting CSR activity by Stackelberg game theory in both centralized and decentralized models with a consideration of prices, recycling, consumer surplus, and profits for the chain players in the two models with different CSR ratios. Through calculation and analyses of the models, we note that the chain members have the best status when the consumers’ WTP for new and remanufactured products is within a threshold. Subsequently, we compare the optimal price decisions and the expected profits in the decentralized and centralized systems, and we find that the retail price, wholesale price, and recycling rate decrease with a rising CSR under WTP differentiation. The centralized retail price is lower than the decentralized one. Conversely, the profit is higher when the increment of demand is higher. On top of that, in common cases, the pure and total profits of manufacturing are ascending while the retailer’s profit is descending. We also find that the consumer surplus is increasing in two cases. Finally, to motivate the players in the supply chain to engage in CSR activity, we consider the revenue sharing contract. From the perspective of WTP differences, this paper studies CSR remanufacturing, which has certain influences on the sustainable development of the economy.

Analysis of evolutionary game in structural formation of market power in remanufacturing supply chains

ABSTRACTIt is normal for enterprises to engage in remanufacturing nowadays. Nevertheless, the concern of enterprises and researchers is whether remanufacturers should compete for leadership in supply chains. Considering the WTP for new and remanufactured products differs, this article the evolutionary game theory model in three structures of leadership in supply chains. It investigates the processes of market evolution and choices of strategies when manufacturers and retailers compete or do not compete for leadership in the market. It has been shown in the case of market evolution, according to the 12 conditions formed from different prices that manufacturer and retailer have to pay for competing for leadership, there are five types of ultimate evolutionary stability about the choices of strategies. Further analyses show that these five different evolutionary stability results include nine different evolutionary paths. Analyses of examples further show the evolutionary processes and results in distinct circumstances. This article extends the application of the evolutionary game in remanufacturing supply chains in theory and provides some guidance for enterprises to make decisions when they consider whether they compete for leaders in remanufacturing supply chains in reality.

Optimal design of a manufacturing-remanufacturing-transport system within a reverse logistics chain

Due to environmental preoccupations and hard economic competition, many production firms are devoted to collect and remanufacture used end-of-life products. Therefore, throughout the past years, design and optimization of manufacturing remanufacturing supply chains have been receiving great attention from academic researchers and firms leaders. In the literature, most works have assumed that new products have the same quality and price as remanufactured ones. Furthermore, rare existing works have considered transport activities in manufacturing remanufacturing supply chains. However, in real-world systems, the remanufactured products are perceived as lower quality compared to new ones, and the transportation time usually has an impact on the inventory management. In this work, we aim to bridge the gap in works on manufacturing/remanufacturing, by investigating an optimal design of manufacturing-remanufacturing-transport system, while taking into account the distinction between new and remanufactured products, and transport activities between the manufacturing and remanufacturing stores and the purchasing warehouses in the cities. This paper considers a manufacturing/remanufacturing system composed of two parallel machines, manufacturing and remanufacturing stocks, purchasing warehouses, transport vehicles, and recovery inventories. The objective is to determine the optimal capacities of the manufacturing and remanufacturing stocks, purchasing warehouses, transport vehicles, as well as the optimal percentage of end-of-life returned products. These decision variables maximize the total profit function. An optimization method inspired from evolutionary algorithm is developed to find the optimal value of decision variables. Eventually, numerical results are presented to show the impact of returned products and transportation time on decision variables.

The boomerang returns? Accounting for the impact of uncertainties on the dynamics of remanufacturing systems

Recent years have witnessed companies abandon traditional open-loop supply chain structures in favour of closed-loop variants, in a bid to mitigate environmental impacts and exploit economic opportunities. Central to the closed-loop paradigm is remanufacturing: the restoration of used products to useful life. While this operational model has huge potential to extend product life-cycles, the collection and recovery processes diminish the effectiveness of existing control mechanisms for open-loop systems. We systematically review the literature in the field of closed-loop supply chain dynamics, which explores the time-varying interactions of material and information flows in the different elements of remanufacturing supply chains. We supplement this with further reviews of what we call the three ‘pillars’ of such systems, i.e. forecasting, collection, and inventory and production control. This provides us with an interdisciplinary lens to investigate how a ‘boomerang’ effect (i.e. sale, consumption, and return processes) impacts on the behaviour of the closed-loop system and to understand how it can be controlled. To facilitate this, we contrast closed-loop supply chain dynamics research to the well-developed research in each pillar; explore how different disciplines have accommodated the supply, process, demand, and control uncertainties; and provide insights for future research on the dynamics of remanufacturing systems.

A fuzzy goal programme with carbon tax policy for Brownfield Tyre remanufacturing strategic supply chain planning

Abstract A comprehensive tyre remanufacturing supply chain strategic planning model is proposed under uncertainty and group decision making environment for reconfigurable supply chain to integrate business economics with carbon tax policy. To solve the proposed fuzzy multi-objective mixed integer programme model, a methodology is designed by combining various techniques. Numerical experiments were conducted to provide important policy insights for industry practitioners and the government such as (1) developed carbon tax-reward policy and carbon-tax- reward-forex policy other than carbon tax policy for future tyre remanufacturing supply chain carbon emission policies, (2) evaluated the possible influence of distance of used product suppliers from initial deposit facility on reconfigurable tyre remanufacturing strategic supply chain planning, (3) designed the measure of the greenness i.e. the greenness index of various tyre remanufacturing supply chains to compare various supply chains in the tyre remanufacturing industry, (4) suggested the foreign exchange (forex) reward rate for a tyre remanufacturing supply chain on basis of its greenness index in the tyre remanufacturing industry.

The impact of government subsidy and tax policy on the competitive decision-making of remanufacturing supply chains

In this paper, we consider a two-period competition model of a remanufacturing supply chain consisting of three members: a new product manufacturer, a recycler and a remanufacturer. The manufacturer supplies new products in the first period and the remanufacturer participates in the competition in the second period. We consider three scenarios in the second period: (1) there is no government subsidy in the competition; (2) there is only government subsidy in the competition; (3) there are both government subsidy and tax in the competition. First, we give the optimal decision-making of the manufacturer, the remanufacturer and the government in the three scenarios; second, we analyse changes in the decision-making of the manufacturer and remanufacturer in the three scenarios and compare their results. We analyse the effects of government subsidy and tax and their asymmetric use on manufacturers’ and remanufacturers’ decision-making variables and competitive performance. We also take consumer awareness of environmental protection into account and examine its impact on subjects’ decisions. Lastly, we operate a numerical example to show the results.

Cooperation or Competition? Channel Choice for a Remanufacturing Fashion Supply Chain with Government Subsidy

In this paper, we address the problem of choosing an appropriate channel for the marketing channel structure of remanufactured fashion products. To be specific, we consider a remanufacturer who has two options for selling the products: (1) provide the remanufactured products to a manufacturer, then the manufacturer sells both new products and the remanufactured products to customers, and (2) sell the remanufactured products directly to customers. Because of the relatively low acceptance of remanufactured products and environment consciousness of customers in developing countries like China, we model the two scenarios as decentralized remanufacturing supply chains, with the manufacturer being the Stackelberg leader and the government offering subsidy to the remanufacturer to incentivize remanufacturing activities. We find that the subsidy can incentivize remanufacturing activity regardless of the remanufacturer’s channel choice. A “too high” or “too low” subsidy makes the remanufacturer compete with the manufacturer, and an intermediate subsidy results in cooperation between the two members of the remanufacturing supply chain. Meanwhile, if the customers’ acceptance for remanufactured products is higher, the remanufacturer will be more likely to compete with the manufacturer. However, the remanufacturer’s optimal channel choice may be inefficient in the sense of social welfare and environmental protection.