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Sustainability 2018, 10(1), 151; https://doi.org/10.3390/su10010151

Owning or Outsourcing? Strategic Choice on Take-Back Operations for Third-Party Remanufacturing

1,†
,
1,†,* , 1,2,†
,
1
and
1
1
School of Management and Economics, University of Electronic Science and Technology of China, Chengdu 611731, China
2
Center for West African Studies, University of Electronic Science and Technology of China, Chengdu 611731, China
These authors contributed equally to this work.
*
Author to whom correspondence should be addressed.
Received: 1 December 2017 / Revised: 25 December 2017 / Accepted: 8 January 2018 / Published: 9 January 2018
(This article belongs to the Special Issue How does Outsourcing Affect the Economy and its Sustainability?)
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Abstract

Despite the remanufacturing process having demonstrated economic, social, and environmental benefits, many original equipment manufacturers (OEMs) have not engaged in the remanufacturing process themselves, as they often outsource it to a third party. In practice, such outsourcing usually involves two different options/modes for OEMs with consideration of take-back operations: (1) owning the reverse channel and collecting cores directly (Model D) or (2) outsourcing these operations to a third-party remanufacturer (TPR) and collecting cores indirectly (Model I). However, this raises the important question of whether OEMs should also outsource their reverse channels to third-party remanufacturers when outsourcing remanufacturing. Furthermore, there needs to be an investigation of which method is more beneficial in terms of economic, social, and environmental outcomes. This paper uses modelling to investigate the costs and benefits of these options in terms of sustainability. We found that, compared to Model I, the OEM conducting take-back operations itself can achieve the overall better outcomes for all economic, social, and environmental situations. View Full-Text
Keywords: sustainability; remanufacturing; reverse channels; outsourcing; game theory sustainability; remanufacturing; reverse channels; outsourcing; game theory
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Yan, W.; Li, H.; Chai, J.; Qian, Z.; Chen, H. Owning or Outsourcing? Strategic Choice on Take-Back Operations for Third-Party Remanufacturing. Sustainability 2018, 10, 151.

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