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Pricing and recycling decisions of remanufacturing alliances with third-party recycling platform

Author

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  • Xiaogang Cao

    (Wuhan Textile University
    The Key Research Base of Humanities and Social Sciences in Colleges and Universities in Hubei Province-Enterprise Decision Support Research Center)

  • Pengju Yuan

    (Wuhan Textile University)

  • Hui Wen

    (Hubei University of Technology)

  • Cuiwei Zhang

    (Wuhan Textile University)

  • Kai Huang

    (McMaster University)

Abstract

In this paper, we investigate a closed-loop supply chain where the original manufacturer plays as the channel leader and the third-party recycling platform participates in the recycling of used products. The remanufacturer produces remanufactured products through a remanufacturing license, and four different types of alliances are investigated as: the third-party recycling platform and the original manufacturer alliance, the third-party recycling platform and the remanufacturer alliance, the original manufacturer and the remanufacturer alliance, the original manufacturer and the remanufacturer and the third-party recycling platform alliance. We compare the overall benefits of different alliances and find that the alliance of the original manufacturer, the remanufacturer and the third-party recycling platform has the largest income. We set up a reasonable profit distribution mechanism under the alliance, which can make the three parties get the optimal benefit and make the whole CLSC remanufacturing alliance reach the Pareto optimum. We also compare the recycling rates across alliances and find that the recycling rate is highest in the case of the remanufacturer and the third-party recycling platform alliance, whose recycling rate is positively correlated with recycling costs. Importantly, we make a comparative analysis of the equilibrium decisions and profit distribution of the four alliance models with the participation of the third-party platform. Both the original manufacturer and the remanufacturer need to seek a third-party platform as partners, but if there are conflicts between two manufacturers, the third-party recycling platform may become a mediator between the original manufacturer and the remanufacturer in the supply chain. The results of our study will provide a theoretical basis for enterprises to choose the appropriate alliance in closed-loop supply chains.

Suggested Citation

  • Xiaogang Cao & Pengju Yuan & Hui Wen & Cuiwei Zhang & Kai Huang, 2025. "Pricing and recycling decisions of remanufacturing alliances with third-party recycling platform," Annals of Operations Research, Springer, vol. 349(2), pages 1311-1343, June.
    • Handle: RePEc:spr:annopr:v:349:y:2025:i:2:d:10.1007_s10479-022-05003-9
    DOI: 10.1007/s10479-022-05003-9
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    References listed on IDEAS

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