Supplier-remanufacturing and manufacturer-remanufacturing in a closed-loop supply chain with remanufacturing cost disruption

This paper studies remanufacturing cost disruption in a closed-loop supply chain consisting of a supplier, a manufacturer and a retailer. Specifically, the proposed work compares supplier-remanufacturing and manufacturer-remanufacturing modes with respect to equilibrium strategies and chain members' profits, and analyzes the impacts of different disruption cases on each remanufacturing mode. Stackelberg game is applied to acquire equilibrium pricing decisions of each disruption case and it is found that the manufacturer-remanufacturing and supplier-remanufacturing modes have identical robustness. In manufacturer-remanufacturing mode, when the remanufacturing cost faces negative disruption, the manufacturer prefers to elevate the acquisition price and remanufacture more to improve profitability. In this case, the supplier will set a relatively lower wholesale price of components due to the marketing competition from the manufacturer, and the retailer can obtain more revenues. In supplier-remanufacturing mode, since the remanufactured components may cannibalize new component sales, the supplier will forgo some profits from new components in order to extract more profits from remanufacturing activities only if the negative disruption of remanufacturing cost is large enough. These results can provide a new insight into supplier-remanufacturing with cost disruption in a closed-loop supply chain.