Closed - Loop Supply Chain Models with Product Remanufacturing

By Canan Savaskan, Shantanu Bhattacharya, L. V. Wassenhove. Management Sciences, 2004

2,233 citations recorded by the source corpus.

The importance of remanufacturing used products into new ones has been widely recognized in the literature and in practice. In this paper, we address the problem of choosing the appropriate reverse channel structure for the collection of used products from customers. Specifically, we consider a manufacturer who has three options for collecting such products: (1) she can collect them herself directly from the customers, (2) she can provide suitable incentives to an existing retailer (who already has a distribution channel) to induce the collection, or (3) she can subcontract the collection activity to a third party. Based on our observations in the industry, we model the three options described above as decentralized decision-making systems with the manufacturer being the Stackelberg leader. When considering decentralized channels, we find that ceteris paribus, the agent, who is closer to the customer (i.e., the retailer), is the most effective undertaker of product collection activity for the manufacturer. In addition, we show that simple coordination mechanisms can be designed such that the collection effort of the retailer and the supply chain profits are attained at the same level as in a centrally coordinated system.

Subfields: Management Information Systems, Management Science and Operations Research, Strategy and Management

View Paper: https://www.semanticscholar.org/paper/1b93b27d4b7e06b916c86bee441775e92cf3fda6

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In Management Information Systems

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Citations in the corpus

Efficient Take‐Back Legislation (2009, background): “…chosen as a function of the collection rate, not the total quantity collected, as c can be thought of as the percentage of environmentally educated consumers (see Savaskan et al. 2004 for a similar operations approach, and Lilien et al. 1992 and Fruchter and Kalish 1997 for marketing approaches).”
Managing new and differentiated remanufactured products (2010, background): “…on the economics of remanufacturing has seen important contributions in the study of supply-chain coordination (Corbett and Savaskan, 2002; Savaskan et al., 2004; Savaskan and Van Wassenhove, 2006), collection and leasing (Guide et al., 2003; Ray et al., 2005; Heese et al., 2005; Qu and…”
Coordination contracts of dual-channel with cooperation advertising in closed-loop supply chains (2017, background): “By referring to Savaskan et al. (2004), γ = i A , where γ is input coefficient.”
An Analysis of Monopolistic and Competitive Take‐Back Schemes for WEEE Recycling (2011, methodology): “Savaskan et al. (2004) study a monopolist manufacturer’s choice be-tween alternative collection channel structures: (i) direct from product holders, (ii) via an existing re-tailer, and (iii) subcontracting to a third party.”
OR FORUM - The Evolution of Closed-Loop Supply Chain Research (2009, background): “Savaskan et al. (2004) analyzed the problem of who (retailer or manufacturer) should collect the returned prod ucts under monopoly and competitive situations.”