Remanufacturing Policies Options for a Closed-Loop Supply Chain Network

Due to the need for resource utilization and environmental protection, remanufacturing is used as an effective means to achieve a circular economy. To focus on the production and sales of new products, manufacturers outsource the remanufacturing of used products to remanufacturers. Aiming at helping manufacturers to choose between self-remanufacturing and outsourcing remanufacturing policies, a closed-loop supply chain network equilibrium model considering the remanufacturing policy options is established. The equilibrium decision-making is obtained by using the variational inequality method. Furthermore, the criteria for manufacturers to choose between the two remanufacturing policies based on different factors such as recovery rates of the used products, remanufacturing costs, and environmental impact parameters, are given. Numerical examples show the following results: (1) When compared with self-remanufacturing policy, outsourcing remanufacturing policy can save resources, increase the sales of products, and have a smaller environmental impact. (2) When the recycling rate of used products is low, choosing an outsourcing remanufacturing policy can increase the sales of products. When the recycling rate is high, choosing a self-remanufacturing policy can get more profits. (3) When the costs of a self-remanufacturing policy and an outsource-remanufacturing policy are quite different, choosing the outsourcing remanufacturing policy can save resources and protect the environment.