COMPETITION AND COOPERATION STRATEGIESIN THE SUPPLY CHAINS WITH REMANUFACTURING AND REFURBISHING

Refurbishing and remanufacturing differ in that the former allows for restored products of lower quality than new ones. Motivated by the competition between the refurbished product and remanufactured product, our article examines the strategic choices for remanufacturing between the original equipment manufacturer (OEM) and the upstream manufacturer/rival third party. We develop a no-remanufacturing competition model and two cooperative remanufacturing models to characterize the problems. By analyzing the equilibrium market structure of each model, we try to explore who (manufacturer or third party) is the best remanufacturing partner when refurbished products appear. The results show that the OEM is always willing to cooperate with the manufacturer or the third party, but such cooperation will not always possible. In both cooperative models, the third party tends to prioritize improving the quality of refurbished products. Additionally, the manufacturerremanufacturing model consistently demonstrates a lower environmental impact. Our study provides some important managerial implications that can be utilized as strategic guidance for the remanufacturing industry.