Decision-Making of Closed-Loop Supply Chain Strategic Alliance Considering the Quality Level of Remanufactured Products and Patent Protection

Xiaogang Cao, Hui Wu (), Hui Wen and Kebing Chen ()
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Xiaogang Cao: School of Management, Wuhan Textile University, Wuhan 430073, P. R. China2The Key Research Base of Humanities and Social Sciences in Colleges and Universities in Hubei Province-Enterprise, Decision Support Research Center, Wuhan 430073, P. R. China
Hui Wu: School of Management, Guangdong University of Science and Technology, Dongguan 523000, Guangdong, P. R. China
Hui Wen: School of Science, Hubei University of Technology, Wuhan 430068, P. R. China
Kebing Chen: College of Economics and Management, Nanjing University of Aeronautics and Astronautics, Nanjing 210016, P. R. China

Asia-Pacific Journal of Operational Research (APJOR), 2020, vol. 37, issue 05, 1-27

Abstract: In this paper, a closed-loop supply chain consisting of a manufacturer, a retailer and a third-party remanufacturer responsible for collecting used products and remanufacturing is constructed. Considering the quality level of remanufactured products, four kinds of closed-loop supply chain alliance structure models are constructed. The optimal equilibrium decisions of these four models are compared and analyzed. The optimal decisions of the models are verified by numerical analysis. Furthermore, the impacts of the quality of remanufactured products and the decision influence of the third-party remanufacturer in the alliance on the remanufacturer’s decision are further analyzed. The results show that remanufactured products are competitive with new products, and the improvement of the remanufactured product quality will reduce the market demand of new products. The equilibrium decision of the closed-loop supply chain is affected by the alliance behavior of members in the closed-loop supply chain and the quality level of remanufactured products. The higher the decision concentration of the closed-loop supply chain is, the more favorable the supply chain is; the higher the remanufacturing quality level is, the more favorable the supply chain is, and the alliance decision of the third-party remanufacturer is affected by the quality level of remanufactured products and the decision-making influence of the third-party remanufacturer in the alliance structure. We find that the improvement of the concentration degree of closed-loop supply chain decision can benefit the supply chain by improving the remanufacturing quality level, which has direct effect on the alliance decision of the third-party remanufacturer. In most cases, the choice of the alliance is the dominant decision of the third-party remanufacturer.

Keywords: Closed-loop supply chain; strategic alliance structure; quality level of remanufactured products; patent protection; Stackelberg game (search for similar items in EconPapers)
Date: 2020
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DOI: 10.1142/S0217595920500219

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