Closed-loop supply chain models with product take-back and hybrid remanufacturing under technology licensing

The economical and environmental benefits of remanufacturing have been widely recognized in literature and practical life. In this paper, we consider a closed-loop supply chain consisting of a manufacturer, a distributor and a third party, who are engaged in producing remanufactured products. Additionally, the manufacturer as the channel leader tends to cooperate with the distributor and the third party by technology licensing. Specifically, we develop three hybrid remanufacturing models: (1) the manufacturer collects and remanufactures used products by herself (Model M), (2) the manufacturer re manufactures a fraction of used products and licenses the distributor to remanufacture while the distributor collects used products (Model MD), (3) the manufacturer remanufactures a fraction of used products and licenses the third party to remanufacture while the third party collects used products (Model MT). We discuss the impacts of remanufacturing ability on the chain members and environmental sustainability, and also analyze the role of saving unit cost in the remanufacturing process. Moreover, we apply the Stackelberg game to attain the equilibrium strategies from the perspective of chain members' profits. The profit of the manufacturer, the distributor and the third party reaches the most in Model M, Model MD and Model MT, respectively. These results can help achieve an optimal approach of hybrid remanufacturing in a closed-loop supply chain.(C) 2016 Elsevier Ltd. All rights reserved.