The bright side of manufacturing–remanufacturing conflict in a decentralised closed-loop supply chain

2.50
Hdl Handle:
http://hdl.handle.net/10547/594465
Title:
The bright side of manufacturing–remanufacturing conflict in a decentralised closed-loop supply chain
Authors:
Zhou, Yu; Xiong, Yu; Li, Gendao; Xiong, Zhongkai; Beck, Matthias
Abstract:
Researchers and managers broadly agree that original equipment manufacturers (OEMs), which have opportunities to produce both new and remanufactured products, are better off by centrally controlling their manufacturing and remanufacturing activities. Thus, OEMs should not remanufacture used products until the remanufacturing cost is sufficiently low to overcome the negative impact of new product cannibalisation. In this paper, we present a contrasting view of the manufacturing–remanufacturing conflict: OEMs sometimes benefit from the decentralised control mode under which they ignore the internal cannibalisation rather than the remanufacturing option. We consider a decentralised closed-loop supply chain in which one OEM can purchase new components from one supplier to produce new products and collect used products from consumers to produce remanufactured products. The key feature of our model is that the OEM can select a centralised or decentralised control mode to manage its manufacturing and remanufacturing activities before the supplier prices the new component. In a steady state period setting, we analyse the players’ optimal decisions and compare the OEM's profits under centralised and decentralised control modes. Our analytic results reveal that the decentralised control within the OEM can outperform the centralised control when the cost structure of producing new and remanufactured products satisfies certain conditions. Finally, the key findings are distilled in a conceptual framework and its managerial implications are discussed.
Citation:
Zhou, Y. et al (2013) 'The bright side of manufacturing–remanufacturing conflict in a decentralised closed-loop supply chain' International Journal of Production Research 51 (9):2639
Publisher:
Taylor & Francis
Journal:
International Journal of Production Research
Issue Date:
May-2013
URI:
http://hdl.handle.net/10547/594465
DOI:
10.1080/00207543.2012.737956
Additional Links:
http://www.tandfonline.com/doi/abs/10.1080/00207543.2012.737956
Type:
Article
Language:
en
ISSN:
0020-7543; 1366-588X
Appears in Collections:
Business and Information Systems Research Centre (BISC)

Full metadata record

DC FieldValue Language
dc.contributor.authorZhou, Yuen
dc.contributor.authorXiong, Yuen
dc.contributor.authorLi, Gendaoen
dc.contributor.authorXiong, Zhongkaien
dc.contributor.authorBeck, Matthiasen
dc.date.accessioned2016-01-21T10:52:30Zen
dc.date.available2016-01-21T10:52:30Zen
dc.date.issued2013-05en
dc.identifier.citationZhou, Y. et al (2013) 'The bright side of manufacturing–remanufacturing conflict in a decentralised closed-loop supply chain' International Journal of Production Research 51 (9):2639en
dc.identifier.issn0020-7543en
dc.identifier.issn1366-588Xen
dc.identifier.doi10.1080/00207543.2012.737956en
dc.identifier.urihttp://hdl.handle.net/10547/594465en
dc.description.abstractResearchers and managers broadly agree that original equipment manufacturers (OEMs), which have opportunities to produce both new and remanufactured products, are better off by centrally controlling their manufacturing and remanufacturing activities. Thus, OEMs should not remanufacture used products until the remanufacturing cost is sufficiently low to overcome the negative impact of new product cannibalisation. In this paper, we present a contrasting view of the manufacturing–remanufacturing conflict: OEMs sometimes benefit from the decentralised control mode under which they ignore the internal cannibalisation rather than the remanufacturing option. We consider a decentralised closed-loop supply chain in which one OEM can purchase new components from one supplier to produce new products and collect used products from consumers to produce remanufactured products. The key feature of our model is that the OEM can select a centralised or decentralised control mode to manage its manufacturing and remanufacturing activities before the supplier prices the new component. In a steady state period setting, we analyse the players’ optimal decisions and compare the OEM's profits under centralised and decentralised control modes. Our analytic results reveal that the decentralised control within the OEM can outperform the centralised control when the cost structure of producing new and remanufactured products satisfies certain conditions. Finally, the key findings are distilled in a conceptual framework and its managerial implications are discussed.en
dc.language.isoenen
dc.publisherTaylor & Francisen
dc.relation.urlhttp://www.tandfonline.com/doi/abs/10.1080/00207543.2012.737956en
dc.rightsArchived with thanks to International Journal of Production Researchen
dc.subjectclosed-loop supply chainen
dc.subjectremanufacturingen
dc.subjectinternal conflicten
dc.subjectstrategic decentralisationen
dc.subjectsupply chainen
dc.titleThe bright side of manufacturing–remanufacturing conflict in a decentralised closed-loop supply chainen
dc.typeArticleen
dc.identifier.journalInternational Journal of Production Researchen
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