Warranty Period Decision and Coordination in Closed-Loop Supply Chains Considering Remanufacturing and Consumer Behavior

The closed-loop supply chain management model is an effective way to promote sustainable economic development and environmental protection. Increasing the sales volume of remanufactured products to stimulate green growth is a key issue in the development of closed-loop supply chains. By designing an effective warranty strategy, customer’s perceived value can be enhanced and market demand can be stimulated. This study cuts through the warranty period of closed-loop supply chain products. Based on the perspective of consumer behavior, game theory is used to construct the optimal decision-making model for closed-loop supply chains. The optimal warranty decision making for new products and remanufactured products under centralized and decentralized decision-making models is discussed. Further, the impact of the closed-loop supply chain system with warranty services and the design of contract coordination is also shown. We show that consumer preference has a positive impact on the sales of remanufactured products and the profits of enterprises; with the extension of the new product and remanufacturing warranty period, the profit of the supply chain system first increases and then decreases, and the value is maximized at the extreme point in the manufacturer-led decision-making model. Furthermore, the leader gains higher profits with bargaining power, but the profit of the supply chain system under decentralized decision model is less than that of the centralized decision model, reflecting the double marginalization effect. The revenue sharing contract and the two-charge contract designed in this study coordinate the closed-loop supply chain system with warranty services, so that the member companies in the supply chain can achieve Pareto improvement.

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Inventory decision-making models for a closed-loop supply chain system with different decision-making structures

International Journal of Production Research ◽

10.1080/00207543.2014.946160 ◽

2014 ◽

Vol 53 (1) ◽

pp. 183-219 ◽

Cited By ~ 15

Author(s):

Kai Fu Yuan ◽

Shi Hua Ma ◽

Bo He ◽

Yang Gao

Keyword(s):

Decision Making ◽

Supply Chain ◽

Closed Loop ◽

Supply Chain System ◽

Closed Loop Supply Chain ◽

Chain System ◽

Decision Making Models ◽

Inventory Decision

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Inventory decision-making models for a closed-loop supply chain system

International Journal of Production Research ◽

10.1080/00207540903173637 ◽

2009 ◽

Vol 48 (20) ◽

pp. 6155-6187 ◽

Cited By ~ 48

Author(s):

K.F. Yuan ◽

Y. Gao

Keyword(s):

Decision Making ◽

Supply Chain ◽

Closed Loop ◽

Supply Chain System ◽

Closed Loop Supply Chain ◽

Chain System ◽

Decision Making Models ◽

Inventory Decision

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Containerization Method for Logistic Cost Reduction Based on Closed-Loop Supply Chain Model

Volume 1A: 35th Computers and Information in Engineering Conference ◽

10.1115/detc2015-46371 ◽

2015 ◽

Author(s):

Xinyan Ou ◽

Qing Chang ◽

Guoxian Xiao ◽

Jorge Arinez

Keyword(s):

Mathematical Model ◽

Supply Chain ◽

System Performance ◽

Closed Loop ◽

Cost Savings ◽

Supply Chain System ◽

Logistics Cost ◽

Closed Loop Supply Chain ◽

Chain System ◽

Logistic Cost

Logistics cost is an important contributor to the overall cost in a supply chain system. By using collapsible containers, the frequency of return freight can be reduced and the return of containers can be optimized, leading to potential logistic cost savings. However, the dynamic behavior of container flows due to demand, inventory, storage, and repair requirements make it difficult to accurately analyze container system performance. An accurate estimation of this collapsible container usage impact is of great importance for decision-making. This paper describes the development of a mathematical model of the container dynamic flow system by using the collapsible containers. A continuous time, discrete space Markov process is used for stochastic scenario. The model determines the total cost savings, based on the collapsible rate, the number of collapsible containers, the performance of the factory and the supplier and the transportation environment. The presented mathematical formulation enables the evaluation of the system performance. A case study of collapsible container supply chain system demonstrates the advantages of this methodology. In addition, a simulation model of this stochastic system is presented to verify the mathematical model. Simulation tests are conducted to demonstrate the potential logistics cost savings in the closed-loop supply chain system.

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Inventory decisions in a closed-loop supply chain system with learning and rework

International Journal of Procurement Management ◽

10.1504/ijpm.2018.10014395 ◽

2018 ◽

Vol 11 (5) ◽

pp. 551 ◽

Cited By ~ 1

Author(s):

Nughthoh Arfawi Kurdhi ◽

Wakhid Ahmad Jauhari ◽

Oktiviandri Hendaryani

Keyword(s):

Supply Chain ◽

Closed Loop ◽

Supply Chain System ◽

Closed Loop Supply Chain ◽

Chain System ◽

Inventory Decisions

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Consumer value considerations and adoption of remanufactured products in closed-loop supply chains

Industrial Management & Data Systems ◽

10.1108/imds-10-2016-0437 ◽

2018 ◽

Vol 118 (2) ◽

pp. 480-498 ◽

Cited By ~ 24

Author(s):

Yacan Wang ◽

Benjamin T. Hazen ◽

Diane A. Mollenkopf

Keyword(s):

Supply Chain ◽

Supply Chains ◽

Perceived Risk ◽

Closed Loop ◽

Perceived Value ◽

Perceived Quality ◽

Consumer Acceptance ◽

Closed Loop Supply Chain ◽

Content Type ◽

Closed Loop Supply Chains

Purpose The success of closed loop supply chains is contingent upon consumer acceptance of remanufactured products, yet little is known about how consumers value such products. The purpose of this paper is to provide theoretical grounding for understanding consumers’ value perceptions as related to remanufactured products. Design/methodology/approach Diffusion of innovation theory and customer perceived value literature help form the theoretical model, which is tested empirically using survey data of consumers. Structural equation modeling was employed to test the hypotheses. Findings Perceived value of remanufactured products is measured as a function of perceived benefits (environmental benefits; price advantage) and perceived sacrifices (perceived quality; perceived risk), all of which are shown to impact perceived value. Additionally, perceived risk is found to partially mediate the relationship between perceived quality and perceived value. Originality/value This research makes two significant contributions. First, mid-range theory that is contextualized to the closed loop supply chain is developed to aid researchers and practitioners in better understanding the consumer’s role in the closed loop supply chain, as related to the acceptance of remanufactured products. Second, consumer acceptance of remanufactured products represents a form of supply chain demand risk that has previously been unrecognized. The results provide a foundation for incorporating this type of demand risk in to future research efforts.

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Warranty Decision Model and Remanufacturing Coordination Mechanism in Closed-Loop Supply Chain: View from a Consumer Behavior Perspective

Sustainability ◽

10.3390/su10124738 ◽

2018 ◽

Vol 10 (12) ◽

pp. 4738 ◽

Cited By ~ 4

Author(s):

Xiaodong Zhu ◽

Lingfei Yu ◽

Ji Zhang ◽

Chenliang Li ◽

Yizhao Zhao

Keyword(s):

Supply Chain ◽

Decision Model ◽

Closed Loop ◽

Stackelberg Game ◽

Coordination Mechanism ◽

Market Demand ◽

Supply Chain System ◽

Closed Loop Supply Chain ◽

Chain System ◽

Warranty Service

The remanufacturing warranty strategy has become an effective mechanism for reducing consumer risk and stimulating market demand in closed-loop supply chain management. Based on the characteristics of consumers’ behavior of purchase decisions, this paper studies the warranty decision model of remanufacturing closed-loop supply chain under the Stackelberg game model. The present study discussed and compared the decision variables, including remanufacturing product pricing, extended warranty service pricing, warranty period and supply chain system profit. The research shows that consumers’ decision-making significantly affirms the dual marginalization effect of the supply chain system while significantly affecting the supply chain warranty decision; the improved revenue sharing contract and the two charge contracts respectively coordinates the manufacturer-led and retail-oriented closed-loop supply chain system, which effectively implements the Pareto improvement of the closed-loop supply chain system with warranty services. In the present study, the model is verified and analyzed by numerical simulation.

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Decision-Making and Performance Analysis of Closed-Loop Supply Chain under Different Recycling Modes and Channel Power Structures

Sustainability ◽

10.3390/su11226413 ◽

2019 ◽

Vol 11 (22) ◽

pp. 6413 ◽

Cited By ~ 4

Author(s):

Gong ◽

Chen ◽

Zhuang

Keyword(s):

Decision Making ◽

Supply Chain ◽

Large Scale ◽

Closed Loop ◽

System Efficiency ◽

Power Structures ◽

Supply Chain System ◽

Closed Loop Supply Chain ◽

Channel Power ◽

And Performance

The recycling and remanufacturing of e-waste is linked to a worldwide emphasis on the establishment and implementation of Extended Producer Responsibility system (ERP), which has become an important problem in the process of cycling economy. Meanwhile, with the development and expansion of large-scale retail enterprises, the power structure of supply chain channels is showing a tendency towards diversity as well. However, few studies on closed-loop supply chains (CLSC) have considered both recycling modes and channel power structures. We aim to explore the influence of different recycling modes and channel power structures on the optimal decisions and performance of a closed-loop supply chain (CLSC), considering three recycling channels including manufacturer recycling, retailer recycling and hybrid recycling of retailer and manufacturer and two dominant modes including manufacturer-led and retailer-led. We construct six closed-loop supply chain models under different combinations of three recycling channels and two dominant modes. We analyze the effect of different recycling channels on company decision-making under the same dominant mode, whether participating in recycling has an impact on company decision-making under different dominant modes, and the effect on supply chain members and supply chain system under different dominant modes and recycling channels. The results show that the hybrid recycling strategy is always optimal for both supply chain members; the sub-optimal recycling strategies are both recycled by the subordinate enterprise, and the worst recycling strategies are both recycled by the leading enterprise. Moreover, it is always the worst strategy for manufacturer to participate in a closed-loop supply chain dominated by retailer and recycled by retailer; participating in a closed-loop supply chain dominated by manufacturer and recycled by manufacturer is always the worst strategy for retailer. From a system point of view, system efficiency is the highest under hybrid recycling, and system efficiency is the lowest if leading company recycles separately.

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