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Manufacturer encroachment on a closed‐loop supply chain with design for remanufacturing

Yufei Hu, Lianghua Chen, Yingying Chi and Bowen Song

Managerial and Decision Economics, 2022, vol. 43, issue 6, 1941-1959

Abstract: This paper examines the manufacturer encroachment on both forward and reverse flows of a closed‐loop supply chain with two different design for remanufacturing (DfRem) approaches. We show that both DfRem approaches lead to Pareto improving encroachments under certain conditions. Design for modularity (DfM) compensates for the retailer's encroachment loss through dual positive spillover effects via lower wholesale price and higher buyback price to selling and collecting activities. Design for durability (DfD) simultaneously expands the retailer's sales and stimulates offline collecting via buyback price reimbursement. DfD outperforms DfM in achieving more profitable win‐win encroachments.

Date: 2022
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Handle: RePEc:wly:mgtdec:v:43:y:2022:i:6:p:1941-1959