Production decision for remanufacturing closed-loop supply chain considering government subsidies and environment design

Under the outsourcing and authorizing remanufacturing, the production decision for remanufacturing closed-loop supply chain (CLSC) considering government subsidies and manufacturer’s design for environment is researched. Four CLSC decision models are constructed to analyze the effects of government subsidies and environment design investment on the competition and cooperation between manufacturers and remanufacturers as well as the performance of the CLSC. It shows that the manufacturer can share the government subsidies with the remanufacturer by adjusting unit remanufacturing outsourcing fee or patent licensing fee, so the different subsidy strategies of the government will not affect the optimal production decision and performance of the CLSC. The government subsidies and consumer acceptance degree of remanufactured products are not always conducive to increasing the manufacturer’s design level for environment, but both contribute to promoting the sale of remanufactured products. The manufacturer always has an incentive to invest in design for the environment, and the remanufacturer will only be motivated to accept the environmental design solutions if it can bring more cost savings to the remanufactured product. Compared with the licensed remanufacturing, both the manufacturer and remanufacturer will gain more profits under the outsourced remanufacturing. In addition, government subsidies and environmental design may not always play a role in reducing the total environmental impact of products. © 2022 Northeast University. All rights reserved.