To license or not to license remanufacturing business?
To license or not to license remanufacturing business?
Many original equipment manufacturers (OEMs) face the choice of whether to license an independent remanufacturer (IR) to remanufacture their used products. In this paper, we develop closed-loop supply chain models with licensed and unlicensed remanufacturing operations to analyze the competition and cooperation between an OEM and an IR. The OEM sells new products and collects used products through trade-ins, while the IR intercepts the OEM’s cores to produce remanufactured products and sell them in the same market. We derive optimal decisions for each of the two types of firms in licensed and unlicensed remanufacturing scenarios and identify conditions under which the OEM and the IR would be most likely to cooperate with each other in implementing remanufacturing. The results show although it is beneficial for an OEM to license an IR to remanufacture its cores, it is not always necessary for an IR to accept OEM’s authorization. Moreover, we contrast the result for licensed remanufacturing scenario in the decentralized system with that in the centrally coordinated system to quantify potential inefficiency resulting from decentralization of decision making.
Ma, Zujun
50e23652-5b9d-461d-a697-1289d952cb88
Zhou, Qin
22cc3c1b-50f4-41e0-9c3e-8cdf183a022e
Dai, Ying
e25407ae-4c8b-48d2-a267-92d6c7d36671
Guan, Gao Feng
8466ff19-433f-4d13-9771-8e3f21cbec41
29 January 2018
Ma, Zujun
50e23652-5b9d-461d-a697-1289d952cb88
Zhou, Qin
22cc3c1b-50f4-41e0-9c3e-8cdf183a022e
Dai, Ying
e25407ae-4c8b-48d2-a267-92d6c7d36671
Guan, Gao Feng
8466ff19-433f-4d13-9771-8e3f21cbec41
Ma, Zujun, Zhou, Qin, Dai, Ying and Guan, Gao Feng
(2018)
To license or not to license remanufacturing business?
Sustainability (Switzerland), 10 (2).
(doi:10.3390/su10020347).
Abstract
Many original equipment manufacturers (OEMs) face the choice of whether to license an independent remanufacturer (IR) to remanufacture their used products. In this paper, we develop closed-loop supply chain models with licensed and unlicensed remanufacturing operations to analyze the competition and cooperation between an OEM and an IR. The OEM sells new products and collects used products through trade-ins, while the IR intercepts the OEM’s cores to produce remanufactured products and sell them in the same market. We derive optimal decisions for each of the two types of firms in licensed and unlicensed remanufacturing scenarios and identify conditions under which the OEM and the IR would be most likely to cooperate with each other in implementing remanufacturing. The results show although it is beneficial for an OEM to license an IR to remanufacture its cores, it is not always necessary for an IR to accept OEM’s authorization. Moreover, we contrast the result for licensed remanufacturing scenario in the decentralized system with that in the centrally coordinated system to quantify potential inefficiency resulting from decentralization of decision making.
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sustainability-10-00347
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Accepted/In Press date: 25 January 2018
Published date: 29 January 2018
Identifiers
Local EPrints ID: 473974
URI: http://eprints.soton.ac.uk/id/eprint/473974
ISSN: 2071-1050
PURE UUID: 68ddae4a-2a37-45b1-931f-af69b12db42f
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Date deposited: 07 Feb 2023 17:32
Last modified: 17 Mar 2024 04:18
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Author:
Zujun Ma
Author:
Qin Zhou
Author:
Ying Dai
Author:
Gao Feng Guan
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