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Research on Product Upgrading Strategy in Remanufacturing Environment

Qiuquan Chen, Xianjia Wang


Under the manufacturers and outsourcing authorizing remanufacturing, the production decisions considering the optimal production decision is made under a two-stage game model in which the manufacturer engages in both new product production and discarded product remanufacturing. The competitive and cooperative relationship between manufacturer and who then charge a certain remanufacturing licensing fee to third party remanufacturers is analyzed, and the differences between models M and O in terms of optimal production quantity of new/remanufactured products, economic performance, environmental sustainability and product upgrading incentives are compared. We find that manufacturer are more likely to upgrade products when the remanufacturing is outsourced to a third party remanufacturer. When the remanufacturing business is outsourced, the third party remanufacturer always reduces the profitability of the original product manufacturer, but it is beneficial to the environment.


Green Manufacturing Sustainability; Producing Strategy; Outsourcing Remanufacturing; Game Theory

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DOI: http://dx.doi.org/10.18686/mmf.v6i9.9966