The Impact of Authorized Remanufacturing on Sustainable Remanufacturing

Abstract

Remanufacturing could effectively solve resource shortage and environment crisis and achieve sustainable development of the economy. The original equipment manufacturer (OEM) could not only focus on its core business (i.e., producing new products), but also get profit from remanufacturing through the intellectual property rights. Based on the authorized remanufacturing, the game model between a manufacturer and a remanufacturer was constructed. Based on the game model, the impact of authorized remanufacturing on sustainable remanufacturing is analysed, and the coordination mechanism between manufacturer and remanufacturer is given. The main results are as follows: the OEM could increase its profit and change its unfavourable market competition status by authorizing remanufacturing; a franchise contract could make the sustainability supply chain optimized; when the ratio of the environment effect is greater than a certain threshold, centralized decision-making could not only increase the supply chain revenue, but also reduce the impact on the environment.