Third-party Remanufacturers Research Articles

Does the Bike-Sharing Platform Share Its Own Private Information or Not in a Reverse Supply Chain?

Bike sharing facilitates the public’s daily lives and possesses substantial market demand, yet its overwhelming presence has triggered some environmental problems. To enhance resource utilization efficiency, we examine the decision-making strategies within a reverse supply chain considering the private information of the bike-sharing platform. Using Stackelberg games, two models are formulated in order to investigate whether the platform should share its own private information when the used shared bikes are recycled. A supply chain without private information is provided as a benchmark for comparison, and we obtain the optimal equilibrium strategies of the benchmark and the proposed model. Furthermore, how the optimal strategies change with the variation in parameters and the impacts of the private information on the optimal strategies are discussed. The results show that information asymmetry could lead to a reduction in supply chain efficiency. Thus, a two-part pricing contract is introduced to incentivize the platform to share information and coordinate the supply chain, which can effectively improve the performance of the integral supply chain and implement a “win-win” strategy for the third-party remanufacturer and the platform.

A Study on Remanufacturing Supply Chain Decision-Making Considering Greenness Under Carbon Trading Policy

The aim of this paper is to study the impact of carbon trading system and product greenness on remanufacturing strategy, so a Stackelberg game model is constructed to consider a remanufacturing supply chain consisting of a manufacturer and a third-party remanufacturer under carbon trading policy. Through theoretical analysis and numerical simulation, the relationship between decision variables such as product greenness, price of new products and remanufactured products is analyzed. It is found that: the level of carbon emission reduction is conducive to increase the price of new products and remanufactured products; under certain conditions, a stronger green market demand is conducive to increase the greenness of the products and the profits and prices of the remanufacturing supply chain members; an increase in the investment in green technology will lead to a decrease in the manufacturer's profit and the greenness of the products, and even reduce the price of the products under certain conditions; and under certain conditions, the carbon trading price is effective in regulating the price of new products and the price of the products. Under certain conditions, the carbon trading price can effectively regulate the price of new products and remanufactured products, while the greenness of products will decrease with the increase of carbon trading price.

Optimal Decisions in an Authorized Remanufacturing Closed-Loop Supply Chain under Dual-Fairness Concerns

This paper studies optimal decisions in an authorized remanufacturing closed-loop supply chain (CLSC) consisting of a manufacturer, a retailer, and an authorized third-party remanufacturer with dual-fairness concerns (distributional fairness concerns and peer-induced fairness concerns). Four Stackelberg game models were developed: (i) the dual-fairness concerns are considered by a retailer (model F); (ii) the retailer does not consider both types of fairness concerns (model N); (iii) the retailer only considers the distributional fairness concerns (model D); (iv) the retailer only considers the peer-induced fairness concerns (model P). We use numerical analysis to examine the equilibrium outcomes under dual-fairness concerns. The results show that: (1) The increase in the coefficient of peer-induced fairness concerns will result in more profit for the manufacturer in most cases, while distributional fairness concerns always hurt the manufacturer; (2) In most parameter cases, the increase in the degree of distributional fairness concerns favors the retailer. The retailer considers only peer-induced fairness concerns when the degree of distributional fairness concerns is low and the degree of peer-induced fairness concerns is relatively high, whereas in other cases, two kinds of fairness concerns are ignored; (3) Model P is the most profitable and model D is most disadvantageous for the third party, however, for the manufacturer it is the opposite; (4) The impact of fairness concerns on the environment depends on the retailer’s attitude towards fairness concerns. Model P is better for the environment, while model D has the highest environmental impact. This study introduces dual-fairness concerns into the authorized remanufacturing CLSC model and provides theoretical references for authorized remanufacturing and sustainability practices.

Financing decisions of third‐party remanufacturers with different co‐opetition modes: The impact of blockchain adoption

AbstractThe third‐party remanufacturer (TPR) can cooperate with the original equipment manufacturer (OEM) and remanufactured products are sold by the OEM (i.e., the cooperation mode). The TPR can also sell remanufactured products individually to compete with the OEM's new products (i.e., the competition mode). Considering the issue of false information in remanufacturing supply chains and the TPR's limited capital, we build game models with blockchain to explore the TPR's optimal financing strategies under different co‐opetition mode selections. We find that a high blockchain usage prompts the TPR to finance from the OEM in the competition mode, while a low blockchain usage motivates the TPR to choose the cooperation mode and opt for a bank credit. Besides, we also find that the difference between the TPR's optimal profits of cooperation and competition modes increases with the interest rate.

Blockchain adoption and mode selection strategies for remanufacturing supply chain under cap-and-trade policy

Environmental conservation and economic advantages have propelled the swift expansion of the remanufacturing industry. Many original equipment manufacturers (OEMs) delegate remanufacturing operations to third-party remanufacturers (TPRs) through outsourcing and authorization. Furthermore, blockchain technology enhances consumers’ intention to purchase remanufactured products by disclosing more product information. To investigate the impacts of blockchain on remanufacturing mode selection, this paper focuses on a competitive remanufacturing supply chain comprising an OEM and a TPR under a cap-and-trade policy. Further, four game-theoretic models are derived from whether to adopt blockchain technology and which remanufacturing mode to select. Three major findings are obtained by solving and comparing the four models: (1) Adopting blockchain does not consistently result in advantages for both the OEM and TPR, and they should adopt blockchain for information disclosure in instances where the unit blockchain adoption cost is low, and the disclosure degree of remanufactured product information is also low. (2) Compared with not adopting blockchain technology, if the unit blockchain adoption cost is low, blockchain technology will increase the remanufactured product sales, thereby fostering the advancement of remanufacturing and contributing to reducing the environmental impact. (3) Whether blockchain is adopted or not, the OEM always tends to be in the outsourcing remanufacturing mode. The TPR only opts for the outsourcing remanufacturing mode when consumers’ preference for remanufactured products is high. More importantly, adopting blockchain will likely enhance consumers’ preference for remanufactured products, potentially shifting the TPR’s inclination for remanufacturing mode from authorization to outsourcing in some instances.

A comparative analysis of government intervention under the EPR system: Eco-design and authorized remanufacturing

The extended producer responsibility system and government intervention are among the essential requirements for constructing sustainable economies. In a closed-loop supply chain consisting of an original equipment manufacturer (OEM) and a third-party remanufacturer (TPR), this paper develops four Stackelberg game models for four modes of government intervention under patent licensing: no intervention, tax and subsidy, tax and subsidy plus eco-design tax deduction, and eco-design tax deduction only. The impacts of the different government interventions on the optimal production decision, social welfare, and environment are analyzed and compared. The results indicate that, compared with no government intervention, government tax and subsidy decrease the supply of new products, increase supply of remanufactured products, and raise recycling rates of end-of-life products; on top of tax and subsidy, the government’s eco-design tax deduction can further increase OEM and TPR profits; the environmental impact under different government intervention depends on the ratio of the environmental impacts of remanufactured to new products and the level of eco-design effort. This study provides decision makers (i.e., OEM and TPR) and policy makers (i.e., governments) with new managerial insights on the benefits of eco-design and effective mechanisms to promote it.

Outsourcing or Authorizing? Optimal Options for Third-Party Remanufacturing Modes with Green Consumerism

In recent decades, more and more consumers are becoming concerned about the environment and increasingly tend to buy remanufactured products. However, despite the emergence of green consumerism, many original equipment manufacturers (OEMs) are unlikely to engage in remanufacturing themselves and instead prefer to contract it to third-party remanufacturers (TPRs). Although the literature has recently highlighted the difference between outsourcing and authorizing remanufacturing, it does not explore how green consumerism impacts the choice between these two remanufacturing modes. To fill this gap, in this study, we develop two theoretical models according to which the OEM can outsource or authorize its remanufacturing operations to a TPR to satisfy green consumers who prefer remanufactured products. By comparing optimal outcomes, such as quantities, profit, and environmental factors, our analysis shows that a substantial proportion of environmentally conscious consumers prefer the strategy of remanufacturing outsourcing, which provides a win–win–win strategy for the OEM, the TPR, and the environment; otherwise, the OEM chooses to authorize remanufacturing, which negatively affects the TPR and the environment. As such, we suggest that governments try to increase the proportion of the population that favors green consumerism or implement measures that encourage OEMs to adopt remanufacturing outsourcing.

Eco-Design in Manufacturing or Remanufacturing? The Sustainable Options in a Closed-Loop Supply Chain with Outsourcing

Here, the authors focused on determining the increase in consumers’ preferences for sustainable products, including that of OEMs, who are responsible for the drop in new product sales. We also assessed the effects of remanufacturing by outsourcing to third-party remanufacturers. However, the outsourcing of remanufacturing not only enables the producer to offer a remanufactured product at the same time as manufacturing new units; it also provides OEMs with the flexibility required to peruse eco-design in manufacturing and/or remanufacturing. For instance, Gree and Midea have heavily invested in eco-design to reduce energy costs in manufacturing, while Xerox has adopted a modular design approach to divert materials away from landfills and towards remanufacturing. Following observations of real-world applications, the authors developed two theoretical models in which remanufacturing can be outsourced to an independent remanufacturer, endowing the OEM with the flexibility required to enact eco-design in manufacturing or remanufacturing. This analysis reveals that OEMs tend to put more effort into eco-design in manufacturing than in remanufacturing. Furthermore, such efforts in the name of eco-design may be beneficial for both the OEM and the third-party remanufacturer. As such, this paper encourages governments to provide more incentives that will encourage OEMs to invest in eco-design in manufacturing and establish a possible “win–win” scenario in terms of both environmental and economic performances.

Operational decisions and performance of an outsourcing remanufacturing supply chain under different financing methods

In remanufacturing industry, original equipment manufacturers (OEMs) usually outsource remanufacturing activities to third-party remanufacturers (TPRs) for cost savings and efficiency. Many TPRs often face the problem of funds shortage, impeding the development of remanufacturing. To alleviate the funds shortage, governments have implemented subsidy policies for remanufacturing, however, the delays in subsidy disbursement are common, and TPRs need to seek proper financing methods to obtain funding support. Along this line, we consider an outsourcing remanufacturing supply chain (RSC) comprising a capital-constrained TPR, a retailer, and a well-funded OEM, characterize and compare the corresponding equilibrium solutions under three financing methods, i.e., manufacturer financing, equity financing, and subsidy-based confirmation financing. We find that the equity financing can bring the highest collection rate of EOU products and the lowest sales volume of new products in most cases. When the dividend ratio is extremely low, the equity financing can bring the most profit for the TPR. When the dividend ratio overpasses one certain threshold, the TPR’s financing method depends on the initial capital and dividend ratio. We also conduct numerical analysis to illustrate our findings and gain more managerial insights, which can provide guidelines for TPR’s financing strategy with delayed subsidies.

Financing strategies for a textile and apparel remanufacturing supply chain with the delay in disbursement subsidies

The remanufacturing of end-of-use textile and apparel (T&A) products can reduce greenhouse gas emissions, and remanufacturing by third-party remanufacturers (TPRs) is one of the most common remanufacturing models. Governments have incentivized companies to remanufacture discarded T&A products and subsidize them by enacting diverse policies, but these subsidies often lag behind upfront investments, and several TPRs in this industry often confront financial constraints and need to seek financing. Along this line, we have established a T&A remanufacturing supply chain that includes a well-funded Original Equipment Manufacturer (OEM), which manufactures and sells new T&A products, and a capital-constrained TPR, which is licensed by the OEM to remanufactures end-of-use T&A products. OEM financing and subsidy-based confirmation financing, are considered on top of the benchmark model without financing to the TPR. The results of the research show that initial operating capital level and unit remanufacturing cost are two key factors influencing the choice of TPR financing. When the initial operating capital shortfall is small, it is more advantageous for the TPR to cut down production accordingly by maxing out her in-house capital rather than to obtain loan from a well-funded OEM or bank. When TPR's unit remanufacturing cost is low, it is advisable for TPR to secure a loan from the bank (OEM) under moderate (low) capital shortfall. When the unit remanufacturing cost of TPR is moderate, OEM financing becomes a preferable option for the TPR if its capital shortfall is relatively large.

Nonlinear dynamic in a remanufacturing duopoly game: spectral entropy analysis and chaos control

<abstract><p>In this study, our focus is on stabilizing a competitive game involving an original equipment manufacturer (OEM) and a third-party remanufacturer (TPR). To assess the presence of chaos within the dynamics of this game, we employ various analytical tools, including spectral entropy (SE), bifurcation diagrams, and Lyapunov exponents. The unpredictable nature of chaotic dynamics significantly influences the market and has negative implications for the strategic decisions of both firms. Our approach to counteracting this chaotic behaviour and stabilizing the system revolves around the implementation of the Ott, Grebogi, and Yorke (OGY) method. Crucially, our analysis highlights that the marginal costs ($ c_n $ and $ c_r $) incurred by the OEM and TPR emerge as pivotal factors in achieving stabilization within the game. To provide a tangible demonstration of the effectiveness of our proposed stabilization strategy in the context of this competitive environment, we conducted numerical simulations.</p></abstract>

Quality and selling format choices in a supply chain considering remanufacturing competition

PurposeThe purpose of this study is to explore the interplay between the selection of selling formats of remanufactured products for a third-party remanufacturer (TPR) and the quality decision of an original equipment manufacturer (OEM).Design/methodology/approachThis study considers a remanufacturing supply chain, where the OEM sells new products through a platform retailer, but the products remanufactured by the TPR can be sold via a direct or indirect channel. The authors model a Stackelberg game and explore the optimal quality decision of the OEM and selling format choice of the TPR.FindingsThe OEM's optimal decision depends mainly on consumers' discounted utility coefficient and cost-scale factor of remanufactured products. A higher consumers' valuation of the remanufactured product will not result in a higher retail price, but may lead to an increase in new product's sales. Given the cost-scale factor, the TPR prefers to sell directly no matter what the value of consumers' discounted utility coefficient is. An all-win situation is achieved with selling directly when consumers' discounted utility coefficient is sufficiently large.Practical implicationsThese results provide some support to the operational strategies of the OEM and TPR.Originality/valueThis study firstly endogenizes the quality decision and combines the selling format selection of the TPR and the quality decision of the OEM to explore the interplay between these two important decisions.

Should original equipment manufacturers authorize third-party remanufacturers?

Remanufacturing is well-established as a means for original equipment manufacturers (OEMs) to reduce waste, save on raw materials costs, and tap into new markets. At the same time, OEMs are often skeptical of remanufacturing due to the potential for remanufactured items to steal market share from new items. Third-party remanufacturers (TPRs) experience no such skepticism, since these market players do not sell new items. TPRs often find profit potential in acquiring used items in the marketplace, refurbishing, and reselling them. In response, some OEMs choose to “authorize” these TPRs, as a way to control quality and reputation, while other OEMs do not provide such authorization. By authorizing TPR, an OEM can realize additional revenues from the authorization fees. However, there are two potential downsides: authorization might enhance the perceived value of TPR’s remanufactured products and therefore their competitiveness against new items, and it might trigger quality concerns for the OEM’s new products. The net impact of authorization on OEM and TPR prices and profits, and the optimal structure of an authorization fee, will depend critically on how authorization impacts consumer willingness to pay for new and remanufactured products. We develop an analytical model that enables us to suggest optimal authorization fees and to provide insights into the conditions under which both parties can increase profits when authorization is present. We show that, under certain conditions, TPR authorization can enable the entry of an otherwise-unprofitable TPR into the market, while at the same time increasing OEM profits.

Remanufacturing mode choice considering consumer’s dual preference under patent licensing

Many original equipment manufacturers (OEMs) do not remanufacture by themselves, but instead license the remanufacturing business to other companies for a royalty. This paper examines to whom OEM should outsource remanufacturing when both distributors and independent third-party remanufacturers (TPR) are capable of remanufacturing. We have established three models: OEM licenses remanufacturing to the distributor (model DR); OEM licenses remanufacturing to TPR (model TR); OEM licenses remanufacturing to both the distributor and TPR (model DTR). We compared the optimal strategies of each member of the supply chain in the three models and analyzed the influence of consumers' dual preference for the remanufactured product on the decision making. The results showed that when consumers are reluctant to purchase a certain type of remanufactured product, OEM prefers to outsource the remanufacturing business to TPR. Otherwise, OEM prefers to license remanufacturing to both the distributor and TPR. In terms of two single remanufacturing modes, whether for OEM or TPR, TPR remanufacturing mode is always better than the distributor remanufacturing mode.

Operational and financing decisions of original equipment manufacturers under third-party remanufacturing modes

In recent years, many original equipment manufacturers (OEMs) permit third-party remanufacturers (TPRs) to remanufacture, primarily through outsourcing remanufacturing to the outsourced remanufacturer (UR) or authorizing remanufacturing to the authorized remanufacturer (AR). However, few studies consider OEMs are constrained by the initial capital in the third-party remanufacturing modes. Therefore, our paper supplements this existing literature by integrating the financing strategy into the third-party remanufacturing modes, analyzing and comparing the equilibrium solutions of outsourcing and authorization remanufacturing modes from the perspectives of OEMs, TPRs, and the whole supply chain, respectively. The main findings are as follows. OEMs are more willing to borrow funds from the UR in the outsourcing remanufacturing mode, while OEMs' financing options are influenced by interest rates under the authorization remanufacturing mode. Compared with the authorization remanufacturing mode, the TPRs prefer the outsourcing remanufacturing mode. Moreover, from the perspective of the whole supply chain, supply chain members earn higher profits through bank credit when TPRs' interest rates are relatively high. We also verify the validity of the results by numerical analysis.

Authorization or Outsourcing: Considering the Contrast/Assimilation Effect and Network Externality of Remanufactured Products under Government Subsidy

This paper examines the impact of the contrast/assimilation effect and network externality of remanufactured products on remanufacturing mode selection for original equipment manufacturers (OEMs) under government subsidy. We develop a two-period Stackelberg game model in a closed-loop supply chain (CLSC) composed of an OEM and a third-party remanufacturer (TPR) considering two remanufacturing modes: authorization remanufacturing mode and outsourcing remanufacturing mode. The results show the following: (1) The OEM prefers to select authorization when the contrast/assimilation effect and government subsidy level are both relatively low; otherwise, the OEM prefers outsourcing. The TPR always prefers the outsourcing mode. Therefore, a win–win situation between the OEM and the TPR could be achieved through OEM outsourcing remanufacturing when the government raises subsidy levels or the contrast/assimilation effect is relatively obvious. (2) The outsourcing mode is more beneficial in promoting the sales of remanufactured products and is more environmentally friendly, while the authorization mode is better in regards to consumer surplus and social welfare. (3) OEM, TPR and CLSC could benefit from network externality increasing. The stronger contrast effect (assimilation effect) is profitable to the OEM and CLSC (TPR), but hurts the TPR (OEM and CLSC). (4) Government subsidy can significantly reduce consumer spending on remanufactured products. CLSC members encroach government subsidies which are offered to consumers through pricing adjustments. The findings provide managerial implications for OEMs’ remanufacturing mode strategy in the context of the contrast/assimilation effect and network externality of remanufactured products under government subsidy.

Nonlinear dynamic and chaos in a remanufacturing duopoly game with heterogeneous players and nonlinear inverse demand functions

The purpose of this paper is to investigate the dynamics of a remanufacturing duopoly game model with heterogeneous players and different competition strategies, assuming that the original equipment manufacturer has bounded rationality and aims to maximize profit, and the third-party remanufacturer has an adaptive nature and aims to maximize share in order to get a certain profit. The model behaviours are discussed mainly from the point of view of stability, bifurcations and chaos. By utilizing Jury's stability criteria, the Cournot-Nash equilibrium's asymptotic stability is examined. We found that under certain conditions, when consumer willingness to pay was taken as a bifurcation parameter, the system undergoes a flip bifurcation and a Neimark-Sacker bifurcation. Lyapunov exponents are used to demonstrate that the system becomes chaotic through each of the previous bifurcations.

Optimal Acquisition and Production Policies for Remanufacturing with Quality Grading

Core acquisition is essential to the success of the remanufacturing business. The value of sorting and grading cores into nominal-quality classes has been certified in industry and academia. In this paper, we investigate how many unsorted cores of uncertain quality should be acquired and how many sorted cores should be remanufactured by a third-party remanufacturer (3PR) before the demand is realized. We first develop analytically tractable solutions to the acquisition and production model under deterministic demand, and then we extend it to the model under the stochastic demand by fully characterizing the structure of the optimal policy. Subsequently, we investigate the impact of core quality fraction uncertainty on the solutions. Finally, numerical analyses are conducted to further verify the proposed models. The results are as follows. First, the optimal quantity of acquisition/production and minimum expected profit increase with an increase in the selling price and decrease with an increase in the uncertainty of demand and acquisition cost. Second, the optimal production quantity does not decrease in acquisition quantity, and the rate of utilization of the recycled parts (the ratio of production quantity to acquisition quantity) increases with a decrease in the acquisition cost. Third, the growth stage is most profitable stage, so the remanufacturers should pay more attention to remanufacturing activities early in the life of products. The proposed models and solutions can not only solve the core acquisition and production problem in remanufacturing, but also solve the combinatorial optimization problem.

Does Environmental Education Always Contribute to Remanufacturing Supply Chain Development?

Remanufacturing, as an effective way to save resources and alleviate environmental pollution, has gradually become a sustainable practice. Environmental education contributes to the development of remanufacturing by increasing the number of consumers willing to purchase remanufactured products (RPs). However, the incumbent manufacturer usually has limited remanufacturing capability together with yield uncertainty, making a third-party remanufacturer (3PR) an alternate channel choice. This study develops an analytical model to examine the effects of environmental education on a retailer's choice of remanufacturing channels under in-store competition. Results show that consumer environmental education has the potential to significantly improve the retailer and supply chain profits, and temperate environmental education is always desirable for 3PR. The introduction of 3PR benefits the consumer when the retailer's remanufacturing technology level is low. Furthermore, when the environmental impact of defective RPs is relatively high, and environmental education is temperate, selecting a 3PR will enhance environmental sustainability. This study also shows that 3PR can help achieve a win-win situation when environmental education and consumer acceptance of RPs are both in a certain range.

Cooperation or competition? The remanufacturing strategy with quality uncertainty in construction machinery industry

Construction machinery remanufacturing is energy-consuming and susceptible to quality uncertainty of used products, which increases the variability of cost and carbon emission and affects the production decisions of the original equipment manufacturer (OEM) in return. Therefore, surviving in such a situation by cooperating or competing with the third-party remanufacturer (TPR) is a vital decision for OEM. Incorporating the quality uncertainty, we first establish three remanufacturing models: integrated, outsourcing, and authorization remanufacturing. Secondly, the production decisions of the three models are derived and compared under different strategies (the complete remanufacturing strategy, CRS; the partial remanufacturing strategy, PRS; no remanufacturing strategy, NRS). Finally, the optimal remanufacturing mode and strategy are discussed according to the quantity of new and remanufactured products, profits and carbon emissions. The results suggest: (1) in terms of quantity of new products, integrated remanufacturing can be selected under CRS, and authorization remanufacturing under PRS; integrated remanufacturing generates the largest quantity of remanufactured products; (2) OEM has the highest profit in integrated remanufacturing whichever CRS or PRS is; (3) authorization remanufacturing generates the lowest carbon emissions while integrated remanufacturing generates the highest under CRS, which is the opposite under PRS; (4) as the quality threshold increases, the quantity of new and remanufactured products, profits and carbon emissions first increase and then decrease under CRS; however, new products and total carbon emissions increase, and remanufactured products and profits decrease under PRS; (5) as carbon price increases, the quantity of new products decreases under CRS and PRS, while the remanufactured ones decrease under CRS and increase under PRS; as a discount factor for remanufactured products increases, the quantity of new products increases under CRS and decreases under PRS, while remanufactured products increase under CRS and PRS.