Operational decision-making for a leasing-selling closed-loop supply chain with authorized remanufacturing under carbon cap and trade policy

Strict environmental regulations have led enterprises to emphasize the role of leasing in facilitating the return of used products for remanufacturing. How to make optimal operational decisions in a leasing-selling closed-loop supply chain (CLSC)? How does the carbon cap and trade policy (CCTP) affect operational decisions in a leasing and selling CLSC? To answer the above questions, this paper proposes four operational decision models for a leasing-selling CLSC under royalty/fixed-fee authorization strategy with and without the CCTP, respectively, are proposed. The optimal authorization strategies and operational decisions of entities in the CLSC and the win-win situation are analyzed. The results indicate: (1) There exists a win-win situation. Without the CCTP, it is influenced by the manufacturing cost per unit of new product (NP) used for leasing. When this cost is high the fixed-fee authorization strategy within a certain range authorization fee is a win-win option. Under the CCTP, besides the influence of the manufacturing cost per unit of NP used for leasing, the carbon emissions per unit of NP also affect the win-win situation. (2) When carbon emission savings are medium, the quantity of remanufactured products leased increases with the carbon trading price under the royalty authorization strategy while the opposite is true for the fixed-fee authorization strategy. (3) The increase in the remaining value of product at lease expiration makes the CLSC more environmentally friendly and enhances the emission reduction effect of the CCTP.