Product Design And Operation Decision-making For Remanufacturing Closed-loop Supply Chain Under Multi-coopetition Scenarios

Promoting and implementing the system of Extended Producer Responsibility(EPR)could act as an important national policy to settle the resource and environment issues.As microcosmic realization mechanism of EPR,the economic and environment efficiency of remanufacturing closed-loop supply chain can be greatly affected by the level of product remanufacturability.In a closed-loop supply chain,product remanufacturability is the key factor of making a remanufacturing decision as well as its efficiency,which also guarantee the successful implementation of EPR obligations in the end of supply chain.Therefore,it is urgent and practical to optimize product-remanufacturability design decision from the economical and environmental aspects.However,the design decision on product remanufacturability is not only influenced by governmental regulations but also closely related to members’ coopetition relationship in the market and their operation decisions(e.g.,product pricing decision,production decision,and coordination mechanism).In this line,this research on the product design and operation decisions for remanufacturing closed-loop supply chain under multi-coopetition scenarios is important from both theoretical and practical perspectives.In this paper,we applied various theories and methods such as Stackelberg game,optimization methods under Kuhn-Tucker condition,fairness concern theory,revenue sharing contract and inductive reasoning,and incorporated product remanufacturability,patent licensing and fairness concerns into the closed-loop supply chains under various scenarios including non-competition,manufacturer-remanufacturer competition or coopetition,manufacturer-supplier coopetition ones.Given aforementioned theories and problem formulations,we can figure out the product design and operation decisions for remanufacturing closed-loop supply chain under multi-coopetition scenarios.In this line,we analyses the effect of product design and remanufacturing activity on the efficiency of closed-loop supply chain from the economic and environmental perspectives.The main research contents of this paper are listed as follows:We first uncover the research significance and status of product design and operation decisions in remanufacturing closed-loop supply chain,based on which the organizational structure and main contents are put forward.Then,we provide a comprehensive analysis on the theories of product design and operation decisions for remanufacturing closed-loop supply chain under multi-coopetition scenarios,which involves remanufacturing,product design,closed-loop supply chain,production pattern of remanufacturing and coopetition relationships.The theorical analysis paves the way for the following research.We further analyze the effects of product remanufacturability design on remanufacturing decision boundary condition and its operational efficiency in the case where one oligopolistic manufacturer engages in remanufacturing activity in a non-competition scenario.By building the two-stage decision model of one oligopolistic manufacturer,we explore the optimal level of product-remanufacturability design,new product production and remanufacturing strategies,based on which we analyze the effect of the product-remanufacturability design on economy and environment.The results show that when product-remanufacturability level has no impact on production cost of new product,the boundary conditions of the remanufacturing decision would not be affected by product design decision.When the manufacturer performs partial remanufacturing,adjusting the product design can improve economic and environmental benefits.Given the purely competitive relationship between the manufacturer and remanufacturer,we investigate the impact of the environmental tax,recycling subsidy,and government rewards and penalties for product design on product design and operational decisions of a closed-loop supply chain.Further,we discuss the optimal decisions for different governmental regulations.The result implies that manufacturer’s product design strategy is related to the degree of rewards and penalties for product design and cost parameter rather than environmental tax and recycling subsidy.Environmental tax and recycling subsidy are always disadvantageous for manufacturer,but the introduction of rewards and penalties for product design can reduce the adverse impact of environmental tax and recycling subsidy on manufacturer’s economic benefit.In the remanufacturing closed-loop supply chain with patent licensing,we develop two-stage decision models of manufacturer and remanufacturer under two cooperation modes based on patent licensing.In this case,we investigated product design and operational decisions of a closed-loop supply chain with the coopetition relationship between the manufacturer and remanufacturer,and compared the two cooperation modes with respect to product design,economy and environment.The results show that comparing to fixed patent licensing fees mode,unit patent licensing fees mode can improve remanufacturability level.Environmentally speaking,if the collected products are partially remanufactured,patent licensing charge by unit patent licensing fees mode is more friendly to environment;if the collected products are all remanufactured,the effect of patent licensing mode on environment is related to the relative environmental advantage of remanufactured products.Furthermore,we extended this research to the scenario where fairness concern is introduced into the model in the scenario of the partial remanufacturing of collected products in unit patent licensing fees mode.Hence,we examined the effect of the fairness concerns on product design,operational decisions and coordination.Finally,we examined the issues of product design and operational decisions under different power structures in the remanufacturing closed-loop supply chain composing a manufacturer and a supplier in the forward coopetition scenario.We found that in a manufacturer dominated closed-loop supply chain,the supplier reduces the component’s remanufacturability,and this decision would not be affected by manufacturer’s remanufacturing strategy.Remanufacturing is always good to the manufacturer,but not beneficial for the supplier and environment.However,adjusting the component’s design strategy will improve collective and individual economic benefits to some extent,or reduce the negative effects that product poses on environment.In a supplier dominated closed-loop supply chain,how to formulate the design strategy for component depends on its impact on the production cost of new product,remanufactured product and manufacturer’s remanufacturing strategy.Remanufacturing is not always favorable for members and environment of closed-loop supply chain,however,compared to the case where no member changes its product design strategy,adjusting component and final product design strategies can reduce this negative impact under certain conditions.The contributions of this paper can be summarized as follows:(1)Incorporating government into the competition system consisting of the manufacturer and remanufacturer,we designed the comprehensive regulations including environmental tax,recycling subsidy,rewards and penalties for product design to research their effects on the product design and remanufacturing operational strategies under the purely competitive scenario.We contribute to the optimization of the governmental regulations from the social welfare perspective.(2)In the coopetition scenario where the manufacturer authorizes the remanufacturer to remanufacture,we investigated the manufacturer’s optimal product design and production decisions as well as remanufacturer’s optimal remanufacturing decisions under the scenarios of both two patent licensing cooperation modes and fairness concerns.We not only analyzed the impact of patent licensing and fairness concerns on the product design and operational decisions of a closed-loop supply chain under coopetition scenario,but also investigated the effect of product design strategy on the choice of patent licensing cooperation mode for manufacturer,as well as whether to consider the remanufacturer’s fairness concern.It could further enrich the relevant theory of closed-loop supply chain.(3)Regarding to the closed-loop supply chain of one manufacturer and one supplier,we analyzed the product design,pricing and production decisions under different product design agents and different power structures,solving the problems of product design strategy selection,product pricing and production decisions under the different decentralized scenarios where the product is designed by one or multiple agents.