A Strategic Study Of Manufacturers’ Recycling Remanufacturing Model Options Under Unit Carbon Limits

In recent years,as the economy continues to develop and the population continues to grow,problems such as resource depletion and environmental pollution have become serious challenges facing the world today.Against this background,low carbon economy has become a hot topic in the world,and China is vigorously promoting the transition to a low carbon economy.In the process of transforming to a low carbon economy,the government will set carbon emission limits for enterprises with high energy consumption,and therefore,enterprises need to take measures to reduce carbon emissions in their production process.An increasing number of companies are now taking unit product carbon limits and remanufacturing technologies into account in their production decisions.There are currently three main models for manufacturers to recycle and remanufacture:firstly,manufacturers recycle and remanufacture in-house,secondly,manufacturers recycle and outsource remanufacturing to a third party remanufacturer,and thirdly,manufacturers outsource both recycling and remanufacturing to an independent third party remanufacturer.When a third party remanufacturer is involved in recycling and remanufacturing,it inevitably poses a competitive threat to the new product,and the manufacturer can increase its competitive advantage by charging the remanufacturer a royalty fee.The choice of the optimal recycling model under the unit carbon limit policy has received a lot of attention from decision makers.Based on Stackelberg’s game theory,this paper explores the manufacturer’s choice of recycling mode under the unit carbon limit,considering the manufacturer’s investment in carbon reduction technology for remanufactured products and the manufacturer’s patent licensing fee from the remanufacturer.The two main works are summarised as follows:Firstly,the recycling and remanufacturing mode selection of manufacturers considering the patent licensing fees charged by manufacturers to remanufacturers under unit carbon quota is studied.Under the constraint of unit carbon emission,considering the patent license fee charged by the manufacturer to the remanufacturer,the operational decisions of the manufacturer under the three conditions of the manufacturer’s self-recycling and internal remanufacturing,self-recycling and outsourcing the remanufacturing business to the third party remanufacturer,and outsourcing both recycling and remanufacturing business to the third party remanufacturer were studied respectively.The effects of different recycling and remanufacturing modes on optimal manufacturing/remanufacturing decisions,industry profits and total carbon emissions were analyzed.The research shows that manufacturers should try their best to improve the recovery rate when recycling by themselves,and when outsourcing the recycling business to the remanufacturer,they should also take measures to encourage the remanufacturer to carry out the recycling business,so as to promote the remanufacturer to increase the recovery rate,so as to achieve a win-win situation.When the manufacturer chooses to recycle by itself and remanufacture internally,it can gain the most profit,which is also the most beneficial to the whole industry.When manufacturers choose to recycle and remanufacture in-house,they should do their best to lower the carbon emission allowance on the remanufactured product to minimize the impact on the environment while ensuring maximum profit for themselves.Secondly,a Stackelberg game model between manufacturers and remanufacturers with different decision sequences was constructed to analyse the impact of different decision sequences on manufacturers’ optimal decisions,industry profits and total carbon emissions in the case of manufacturers recycling and outsourcing remanufacturing.The study found that the first decision maker does not have the advantage when playing the game with the remanufacturer,and does not have the initiative to make the decision that will give him/her the advantage,on the contrary,the second decision maker tends to gain more profit.The content of this paper is of scientific significance in establishing and improving the recycling and remanufacturing operation management field of manufacturers under the unit carbon limit and the decision making and methods of different recycling and remanufacturing models on the behaviour of supply chain members.It is also of practical guidance in answering the question of the impact of different remanufacturing models on the optimal decision making of manufacturers/remanufacturers,the industry economy and the environment.