The co-opetitive strategy of a closed-loop supply chain with remanufacturing

This paper deals with a strategic issue of closed-loop supply chains with remanufacturing by developing analytic models under cooperative and competitive settings. The primary goal behind analytic formulation is to investigate under what conditions an original equipment manufacturer (OEM) may take a cooperative approach by participating in remanufacturing. In contrast, the OEM may take a competitive approach by letting the third-party firm remanufacture the returned cores and remarket in the secondary market that competes with the new product. Our analysis reveals that the strategic decision depends critically on the costs of remanufacturing and the competition intensity between the two versions.

► This study formulates analytic models under cooperative and competitive settings. ► This study assumes the remanufacturing cost is lower than the manufacturing cost. ► The remanufacturing cost incurred by the IO is lower than that by the OEM. ► The competitive strategy generates higher profit if substitutability rate is low. ► The competitive strategy generates a lower selling price.