Reverse channel selection under remanufacturing risks: Balancing profitability and robustness

Xiaohua Han, Haiyan Wu, Qianxia Yang and Jennifer Shang

International Journal of Production Economics, 2016, vol. 182, issue C, 63-72

Abstract: Remanufacturing, by taking back used products, can help firms meet environmental regulations and improve economic benefits, but in the meantime it is subject to vulnerability due to operational and disruption risks. In this paper, we investigate manufacturer's reverse channel selection (i.e., how to collect used products from consumers) in a closed-loop supply chain (CLSC) with one dominant retailer when remanufacturing cost is uncertain and subject to disruption. Different from the literature, in this research we study reverse channels from the perspectives of profitability and robustness. We find that on profitability, the direct channel outperforms indirect channel under a favorable operational environment (i.e., static cost or lower cost); while the indirect channel performs better in an adverse environment (i.e., cost rise). Defining infrequent need to change production plan as robustness, we find the indirect channel has higher robustness than the direct channel under remanufacturing risks. Our findings enrich the literature and practice by developing insights into the reverse channel selection and enhance the performance of CLSC.

Keywords: Closed-loop supply chain; Reverse channel; Dominant retailer; Remanufacturing; Supply chain risk management; Game theory (search for similar items in EconPapers)
Date: 2016
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (17)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:proeco:v:182:y:2016:i:c:p:63-72

DOI: 10.1016/j.ijpe.2016.08.013

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