Operational Decisions on Remanufacturing Outsourcing Involved with Corporate Environmental and Social Responsibility—A Sustainable Perspective

Yan, Wei, Chai, Junwu, Qian, Zhifeng, Tsai, Sang-Bing, Chen, Hong and Xiong, Yu (2018) Operational Decisions on Remanufacturing Outsourcing Involved with Corporate Environmental and Social Responsibility—A Sustainable Perspective. Sustainability, 10 (4). p. 1132. ISSN 2071-1050

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Official URL: http://dx.doi.org/10.3390/su10041132

Abstract

Due to increasing consciousness of sustainability and pressure from legislation, numerous studies and managers have sought to integrate traditional operations management with green environment and social responsibility. One such effort is remanufacturing, which has emerged as a growing topic. Although outsourcing remanufacturing operations to third-party remanufacturers (TPRs) has been well studied in the literature, the research has paid little attention to the fact that original equipment manufacturers (OEMs) have the flexibility of outsourcing to other agents but not TPRs. In practice, besides TPRs, many brand-name OEMs have outsourced remanufacturing operations to their suppliers. The question this raises is: TPR vs. supplier, which remanufacturer is better for the economic, environment and social responsibility? To understand this fundamental question, in this paper, we develop two models that allow an OEM to have potential flexibility to (1) outsource remanufacturing operations to a TPR (Model T) or (2) outsource remanufacturing operations to a supplier (Model S). Among other results, we find that, although the Model T creates more potentially sustainable economic, social, and environmental situations, this strategy is not supported by the supplier because it always leaves the supplier worse off. In order to achieve a “win-win-win” outcome that meets economic, social, and environmental requirements for all parties, a revenue-sharing contract is proposed and incorporated into Model T.

Item Type: Article
Uncontrolled Keywords: green operations; environmental impacts; remanufacturing outsourcing; coordination contract; game theory
Subjects: L100 Economics
N100 Business studies
Department: Faculties > Business and Law > Newcastle Business School
Depositing User: Becky Skoyles
Date Deposited: 26 Jul 2018 13:28
Last Modified: 19 Nov 2019 09:47
URI: http://nrl.northumbria.ac.uk/id/eprint/35135

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