Strategy Analysis of Recycling and Remanufacturing by Remanufacturers in Closed-Loop Supply Chain

• Main Authors: Xiaofeng Long, Tong Shu, Shou Chen, Shouyang Wang, Kin Keung Lai, Yan Yang
• Format: Article
• Language: English
• Published: MDPI AG 2017-10-01
• Series: Sustainability
• Subjects: remanufacturing; recycling; production strategies; closed-loop supply chain
• Online Access: https://www.mdpi.com/2071-1050/9/10/1818

The paper investigates interactions in a two-period closed-loop supply chain consisting of a single manufacturer and a single remanufacturer. In the context of recycling and remanufacturing by the remanufacturer, the manufacturer and remanufacturer choose different production strategies. By comparing the costs, profits and equilibrium quantity of supply chain members in decentralized and centralized models, we focus on the conditions under which the remanufacturer chooses to sell the remanufactured products and compete with the manufacturer. Different cooperative strategies can affect closed-loop supply chain decision-making. The article analyzes the impact of each cost and recycling rate on the productions and profits of the manufacturer and remanufacturer, and compares the total profits of members between two models. The sensitivity analysis of the models shows that the centralized model can be an effective way of achieving greater efficiency in terms of the overall supply chain. This study provides insights into the remanufacturing theory, which might guide remanufacturing operations and strategies.