Remanufacturing mode selection considering uncertain EOL products’ quality and differential consumers’ WTP

Li, Bangyi; Tang, Juan; Li, Zhi; Gong, Bengang

doi:10.1108/k-03-2022-0428

Cited by 2 publications

(2 citation statements)

References 37 publications

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“…To avoid dependence on a single analysis, we encourage future researchers to provide empirical support for this theoretical result. Second, we examined a supply chain where the OEM would choose remanufacturing outsourcing or authorization; however, in practice, some OEMs, such as Xerox and Cannon, choose to engage in remanufacturing themselves [32,37]. Future researchers can therefore address the possibility of OEMs engaging in remanufacturing themselves.…”

Section: Discussionmentioning

confidence: 99%

“…However, Zou et al [12] compared the remanufacturing outsourcing or authorization modes by modeling the interaction between the OEM and the third-party remanufacturer in terms of consumer surplus, social welfare, and the environment. Li et al [32] investigated remanufacturing operational strategies under three modes, i.e., in-house, outsourcing, and authorization modes. We follow this stream of research by comparing the differences between optimal decisions, environmental, and economic performance but differ in an important way: we examine the strategic consequences of green consumerism, that is, we extend the previous researchers' results to highlight how green consumerism impacts the choice between the two remanufacturing modes.…”

Section: Literature Reviewmentioning

confidence: 99%

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

Wu,

Zhang,

Shen

2024

Sustainability

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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.

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Section: Discussionmentioning

confidence: 99%

Section: Literature Reviewmentioning

confidence: 99%

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

Wu,

Zhang,

Shen

2024

Sustainability

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The impact of risk aversion on remanufacturing supply chain decisions under quality uncertainty

Ding,

Wang,

Tuerxun

2024

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PurposeAs the risk of uncertain quality of used products potentially hinders remanufacturing, this study aims to examine the impact of risk aversion under quality uncertainty of used products in a remanufacturing supply chain (RSC) consisting of a manufacturer and an independent remanufacturer.Design/methodology/approachWe develop an RSC model where the manufacturer produces new products, outsources remanufacturing to the independent remanufacturer and sells both new and remanufactured products to end consumers. Using a manufacturer-led Stackelberg game framework, we derive the equilibrium solutions under risk-neutral and risk-averse scenarios. Additionally, we design a two-part tariff contract to achieve coordination.FindingsWe show that while risk aversion leads the manufacturer to raise the outsourcing fee, which in turn reduces both the remanufactured quantity and the collection rate of used products. Consequently, consumer surplus and social welfare decline, while environmental impacts rise. The proposed two-part tariff contract can improve the collection rate and social welfare. We also explore two extensions: an authorization remanufacturing scenario and a two-period scenario. We find that risk aversion has no impact on the selection of remanufacturing mode and the equilibria in the first period. Our findings provide timely managerial insights for RSC management.Originality/valueOne of the main risks deterring remanufacturing is the quality uncertainty of used products. However, the risk aversion arising from this uncertainty and its effects have rarely been studied within a game-theoretic framework. This paper fills this gap by analyzing the remanufacturer’s risk aversion under quality uncertainty and investigating its impacts.

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Remanufacturing mode selection considering uncertain EOL products’ quality and differential consumers’ WTP

Cited by 2 publications

References 37 publications

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

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

The impact of risk aversion on remanufacturing supply chain decisions under quality uncertainty

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