456. Channel Strategies for New and Remanufactured Products: The Impact of Operating Costs
Invited abstract in session WC-42: Product recovery and remanufacturing, stream Circular & Sustainable Supply Chains.
Wednesday, 12:30-14:00Room: Newlyn GR.02
Authors (first author is the speaker)
| 1. | Qin Zhou
|
| Decision Analytics and Risk, University of Southampton | |
| 2. | Sunil Tiwari
|
| University of Bristol | |
| 3. | Fanzhuo Zeng
|
| University of Southampton |
Abstract
We analyse a dyadic supply chain where a manufacturer relies on a retailer to distribute new products, remanufactured products, or both, resulting in three distribution models. If the manufacturer bypasses the retailer, it incurs operating costs to establish a direct channel. The manufacturer can adopt one of three remanufacturing strategies: remanufacturing all used products, only some, or none at all. By comparing the firms' profits across these distribution models and remanufacturing strategies, we determine the manufacturer’s optimal channel choice and its effects on the retailer. Our findings reveal that, in addition to selecting among the three remanufacturing strategies, the manufacturer may use remanufacturing as a competitive threat when managing the direct distribution of remanufactured products. While the manufacturer’s decision to separate distribution channels is typically at the expense of the retailer, the retailer can still benefit from this arrangement, even after losing a revenue stream, potentially creating a Pareto improvement scenario for the retailer. Additionally, we show that compared to relying on the retailer for both new and remanufactured product distribution, it is always more advantageous for the manufacturer to manage the distribution of new products directly.
Keywords
- Supply Chain Management
- Reverse Logistics / Remanufacturing
- Sustainable Development
Status: accepted
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