Remanufacturing outsourcing, manufacturer encroachment, and AI-enabled services in a green supply chain

Abstract

This paper constructs a dual-channel Stackelberg game model including the benchmark wholesale model B, the manufacturer encroachment model E, and the front-end and back-end AI-enabled model A. Through comparative static analysis, it is found that the manufacturer's encroachment profit increases with the increase of consumers' green preferences and channel substitutability. When the effective market capacity is positive, the manufacturer's profit under the encroachment strategy is better than that of the benchmark model, and the retailer's profit under the encroachment model is not lower than that under the benchmark model. Additionally, the optimal AI investment increases monotonically with the effective market capacity and efficiency parameters and decreases monotonically with the cost coefficient. When reaching a certain threshold, it shows a significant upward trend. Moreover, the stronger the channel substitutability, the lower the threshold. Under given constraints, the profits of both the manufacturer and the retailer in model A are significantly higher than those in other models. Therefore, moderate front-end and back-end AI collaboration is the key to achieving the triple goals of "encroachment + green + digitalization" and achieving a win-win profit situation between the manufacturer and the retailer. This provides a theoretical basis for enterprises to design direct sales strategies, AI investment intensity, and for governments and platforms to formulate subsidy and cost-sharing policies.