Triple Recycling Channel Strategies for Remanufacturing of Construction Machinery in a Retailer-Dominated Closed-Loop Supply Chain

• Main Authors: Min Huang, Pengxing Yi, TieLin Shi
• Format: Article
• Language: English
• Published: MDPI AG 2017-12-01
• Series: Sustainability
• Subjects: supply chain management; retailer-dominated; triple recycling channel; reverse logistics; construction machinery remanufacturing
• Online Access: https://www.mdpi.com/2071-1050/9/12/2167

Firms engaged in remanufacturing activities generally adopt more than one recycling channel to collect more used products and gain more profits. This paper explores the optimal strategies for a retailer-dominated closed-loop supply chain (CLSC) with a triple recycling channel in the construction machinery remanufacturing context. In this special system, the retailer is the leader and authorized by the original equipment manufacturer (OEM) to remanufacture. Moreover, the OEM, the retailer, and the secondary market all take part in the used products collection activities. Considering the differentiation of the OEM, the retailer, and the secondary market in collecting the used construction machinery, a mathematical model of the CLSC system based on reasonable assumptions is built, the closed-form optimal pricing decisions are derived, and the optimal collection efforts allocation strategies are explored within the framework of the game theory. In addition, the impacts of the reverse logistics cost coefficient, the competing coefficient, and the buy-back price coefficient on the supply chain performance are elaborately analyzed. These achievements provide decision makers with managerial insights and offer efficient guidelines for the construction machinery remanufacturing firms to solve similar puzzles.