A Remanufacturing Equilibrium Analysis of Manufacturing Enterprises Oriented to Sustainable Development

The importance of remanufacturing used products into new ones has been widely recognized in the literature and in practice. In this paper, a model with two competing manufacturers is discussed. In the forward logistics, the manufacturers face the demand with linear down-sloping functions. In the reverse logistics, each manufacturer need to determine whether to invest for collecting his returned items from the market. It is found that only when remanufacturing is turned into a cost advantage, the manufacturer will invest to collect his retuned items. Otherwise the driving forces behind remanufacturing may be other factors, such as legislation. We discuss the rational behaviors of the manufacturers when there is government law in which the lowest return rate is regulated. If a manufacturer cannot reach this rate, he will be punished. Under three different conditions, by analyzing the equilibrium strategies of both manufacturers, we get the low bound of the unit penalty fee.