Remanufacturing and Product Recovery Strategies Considering Chain-to-Chain Competition and Power Structures

Abstract

In addition to its economic potential and environmental significance, remanufacturing shows strategic importance in competition. Product recovery, a fundamental part of the remanufacturing system, should be aligned with the competition between supply chains. Moreover, the power structure of the supply chain influences interactive decisions. In this study, we investigate how supply chain competition and power structure influence product recovery strategies. We model the problem in two competing supply chains, where the manufacturers sell products through the respective retailers. Either manufacturer can choose between two product recovery strategies: collecting the used products for remanufacturing directly (that is, direct recovery) or assigning the task of product recovery to the retailer (indirect recovery). In addition, we conduct full-blown exploration of the impact of power structures, including Stackelberg-Manufacturer as the leader, Stackelberg-Retailer as the leader, and vertical Nash. The results reveal the joint inter- and intra-channel implications of the product recovery strategies.