Team of rivals: How should original equipment manufacturers cooperate with independent remanufacturers via authorisation?

Jin, Minyue; Li, Gendao; Reimann, Marc

doi:10.1016/j.ejor.2021.04.014

Cited by 55 publications

(21 citation statements)

References 44 publications

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“…Secondly, we consider that there are ordinary and green consumers; and green consumers will not buy new products in the presence of remanufactured products. Thus, according to the division proportion of green consumers, we obtain the demand function of remanufactured products, which is different from previous studies (Zhou and Yuen, 2021; Jin et al. , 2022).…”

Section: Introductionmentioning

confidence: 76%

Remanufacturing production decisions considering product life cycle and green consumers' scale in the circular economy

Liu

Song

Zheng

et al. 2022

IMDS

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PurposeIn this paper, the authors aim to study the optimal strategy of original equipment manufacturers (OEMs) considering both consumer segmentation and upward substitution of remanufactured products in the product life cycle.Design/methodology/approachIn this paper, the authors develop two remanufacturing models: the OEM remanufacturing model and the authorized remanufacturing model. Then, the authors study the impact of both green consumers' scale and the product life cycle expressed as the market growth rate on the OEM's optimal decision-making. Therefore, the authors derive the optimal solutions of the two models by using game theory.FindingsThe authors find that in the case of low market growth rate, when there only exist ordinary consumers, if the substitutability of remanufactured products produced by the OEM is below one threshold or above another threshold, the OEM can obtain higher profit in the OEM remanufacturing model, and vice versa. If the substitutability of remanufactured products produced by the OEM is below a threshold when there are both ordinary and green consumers, the OEM prefers the authorized remanufacturing model; and vice versa. Moreover, in the case of high market growth rate, the OEM prefers the OEM remanufacturing model only when the substitution-level in OEM remanufacturing model is above a threshold.Originality/valueThe present study fills the gap in existing researches by simultaneously discussing product life cycle and green consumers' scale. The authors provide manufacturers with a new basis for remanufacturing decisions.

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Section: Introductionmentioning

confidence: 76%

Remanufacturing production decisions considering product life cycle and green consumers' scale in the circular economy

Liu

Song

Zheng

et al. 2022

IMDS

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“…(2) In this paper, we consider that each manufacturer and remanufacturer is operating independently in his manufacturing and remanufacturing business. In the future, we can improve the management of the supply chain by considering the cooperation between original manufacturers and remanufacturers to achieve a win-win situation for both the original manufacturers and the remanufacturers (see [46] for details). Let the Hessian matrix H i represent the second partial derivative of π i with respect to q v i , q ij and q mi .…”

Section: Discussionmentioning

confidence: 99%

Remanufacturing Policies Options for a Closed-Loop Supply Chain Network

2021

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Due to the need for resource utilization and environmental protection, remanufacturing is used as an effective means to achieve a circular economy. To focus on the production and sales of new products, manufacturers outsource the remanufacturing of used products to remanufacturers. Aiming at helping manufacturers to choose between self-remanufacturing and outsourcing remanufacturing policies, a closed-loop supply chain network equilibrium model considering the remanufacturing policy options is established. The equilibrium decision-making is obtained by using the variational inequality method. Furthermore, the criteria for manufacturers to choose between the two remanufacturing policies based on different factors such as recovery rates of the used products, remanufacturing costs, and environmental impact parameters, are given. Numerical examples show the following results: (1) When compared with self-remanufacturing policy, outsourcing remanufacturing policy can save resources, increase the sales of products, and have a smaller environmental impact. (2) When the recycling rate of used products is low, choosing an outsourcing remanufacturing policy can increase the sales of products. When the recycling rate is high, choosing a self-remanufacturing policy can get more profits. (3) When the costs of a self-remanufacturing policy and an outsource-remanufacturing policy are quite different, choosing the outsourcing remanufacturing policy can save resources and protect the environment.

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“…Zhou and Yuen [19] examined an OEM's remanufacturing partner selection over two remanufacturing modes: authorization and outsourcing, and identified OEM's and IR's preference over these two modes. Jin, et al [41] considered dealer authorization mode where an OEM can turn an IR into an authorized seller that sells both new and remanufactured products and found that remanufacturing authorization between an OEM and an IR depends on the improvement of customers' willingness to pay for the remanufactured products because of the authorization cooperation. From the perspective of global supply chains, Guo, et al [42] investigated how local clothing manufacturing in least developed countries is affected by second-hand clothing imports.…”

Section: Literature Reviewmentioning

confidence: 99%

Impact of Intercompetitor Licensing on Remanufacturing Market Competition and Cooperation

Zhou

Yuen

Meng

et al. 2024

IEEE Trans. Eng. Manage.

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This research investigates the impact of intercompetitor licensing between an original equipment manufacturer (OEM) and an independent remanufacturer (IR) on (1) market competition between new and remanufactured products, (2) the IR's remanufacturing strategy, and (3) the IR's optimal quality choice for remanufactured products. In the considered supply chain, the OEM sells new products, and the IR collects used products and then sells remanufactured products to compete with the OEM. To produce remanufactured products, the IR can acquire remanufacturing technology either by paying a licensing fee to the OEM or self-developing it in-house by incurring a fixed research and development cost. We develop game-theoretic models to determine the optimal supply chain decisions concerning the royalty licensing fee, IR's remanufacturing strategy and production quality, and product sale prices.We find that a licensing contract will always induce the OEM and the IR to increase their sales price for new and remanufactured products. However, the OEM will always increase the sales price for new products to a larger degree than that of the IR. This can alleviate price competition between new and remanufactured products and make remanufactured products more competitive in the market. Under licensing cooperation, the IR will always remanufacture used products to a higher quality level which will intensify quality competition. No matter whether the royalty fee is exogenously or endogenously determined by the OEM, there exists a wide range of parameter regions such that a licensing contract will produce a win-win solution for the OEM and the IR. A licensing cooperation may be reached even when the unit royalty fee is at a relatively low level and the total royalty fee is higher than the selfdevelopment option.Managerial relevance statement: From a practical perspective, this study proposes how the OEM, and the IR should make licensing cooperation decision which aims to achieve a win-win solution. It also reveals that a royalty licensing contract can be mutually acceptable between the OEM and the IR in a wide range of parameter regions. This result is important for managers who want to engage in the 2 remanufacturing business. For the OEM, the result shows that licensing its remanufacturing technology at a low royalty fee may still be beneficial. For the IR, the result shows that seeking technology licensing may be more profitable even when the total paid royalty fee is higher than the cost of self-developing the technology. Strategic implications of royalty licensing on market competition, remanufacturing production strategy, and remanufacturing quality strategy should be carefully considered before making strategic decisions on remanufacturing and licensing cooperation.

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Team of rivals: How should original equipment manufacturers cooperate with independent remanufacturers via authorisation?

Cited by 55 publications

References 44 publications

Remanufacturing production decisions considering product life cycle and green consumers' scale in the circular economy

Remanufacturing production decisions considering product life cycle and green consumers' scale in the circular economy

Remanufacturing Policies Options for a Closed-Loop Supply Chain Network

Impact of Intercompetitor Licensing on Remanufacturing Market Competition and Cooperation

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