The Optimal Remanufacturing Strategy of the Closed-Loop Supply Chain Network under Government Regulation and the Manufacturer’s Design for the Environment

Yan Zhou (), Miao Hou and Kar-Hung Wong
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Yan Zhou: Department of Management Science and Engineering, Qingdao University, Qingdao 266071, China
Miao Hou: Department of Management Science and Engineering, Qingdao University, Qingdao 266071, China
Kar-Hung Wong: School of Computer Science and Applied Mathematics, University of the Witwatersrand, Johannesburg 2000, South Africa

Sustainability, 2023, vol. 15, issue 9, 1-34

Abstract: To solve the problem of global warming and resources crisis, we adopt two remanufacturing strategies, denoted ‘In-House Remanufacturing Strategy’ and ‘Outsourcing Remanufacturing Strategy,’ respectively, for recycling and reusing waste products. However, to study the optimal remanufacturing strategy of a closed-loop supply chain (CLSC) network under government regulations and the manufacturer’s design for the environment, we use variational inequality to construct a CLSC network equilibrium model based on these two strategies. By using a comparative analysis of the decision-makers’ profits, carbon emissions, and carbon taxes, we show how the decision-makers should choose the optimal remanufacturing strategies under different government regulations and the manufacturer’s levels of design for the environment. The findings of the study show that the manufacturer’s design for the environment is conducive to resource recovery and promotes the development of remanufacturing activities. When manufacturers’ levels of design for the environment are high, although manufacturers will adopt the outsourcing remanufacturing strategy to obtain high profits, they will lose environmental benefits. The findings also show that the new product handling fee policy in government regulations can promote energy conservation and emission reduction, and the reproduction subsidy policy can encourage product remanufacturing. Moreover, when the government’s subsidy for remanufactured products increases to a threshold, it will prompt manufacturers to adopt the outsourcing remanufacturing strategy; and the remanufacturing subsidy threshold is negatively correlated with the manufacturer’s levels of design for the environment.

Keywords: government regulation; design for the environment; remanufacturing strategy; closed-loop supply chain (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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