Journal
INTERNATIONAL JOURNAL OF PRODUCTION RESEARCH
Volume 55, Issue 22, Pages 6871-6882Publisher
TAYLOR & FRANCIS LTD
DOI: 10.1080/00207543.2017.1357860
Keywords
supply chain management; closed-loop supply chain; third-party remanufacturing; competitive strategy; game theory
Categories
Funding
- National Natural Science Foundation of China [71601025, 71672153, 71631006]
- Postdoctoral Science Foundation of China [2016M602040]
- Fundamental Research Funds for the Central Universities [106112017CDJXY020019]
Ask authors/readers for more resources
It is widely agreed that the entry of third-party remanufacturers (TPRs) hurts original equipment manufacturers (OEMs) because remanufacturing cannibalises the new product sales. In this paper, motivated by the practice of mobile phone remanufacturing, we develop a game theoretical model to revisit the impact of third-party remanufacturing on a forward supply chain in which one OEM purchases critical components from one dominant supplier. The OEM may operate the remanufacturing business as cost-efficient as the TPR. Our analytical results show that regardless of the OEM's remanufacturing capability, third-party remanufacturing could be beneficial to the OEM in that the supplier would lower the wholesale price as a response to the entry of the TPR; in addition, compared with the case without remanufacturing, third-party remanufacturing is always detrimental to the supplier, but the supplier should not always attempt to deter the entry of the TPR because third-party remanufacturing could be less detrimental than the OEM's in-house remanufacturing. Under certain conditions, the two players in the forward supply chain both prefer third-party remanufacturing over in-house remanufacturing. The key intuition driving this finding is that third-party remanufacturing makes the OEM and the supplier allied; while in-house remanufacturing makes them against each other.
Authors
I am an author on this paper
Click your name to claim this paper and add it to your profile.
Reviews
Recommended
No Data Available