Study On Remanufacturing And Closed-loop Supply Chain Under Patent Protection

It has been well acknowledged that remanufacturing could reduce the burden onthe environment and achieve the comprehensive utilization of resources and sustainableeconomic development. Meanwhile, it is encouraging that there is a demand for theremanufactured products in the market，and the firms can obtain enormous social andeconomic benefits. However, in many cases, the original manufacturers are not engagedin remanufacturing of used product option because of the remanufacturing cost or otherfactors，and the other firms have opportunities to enter the remanufacturing market. Butin the patent perfect market, the original manufacturers are protected by patent productsand own the exclusive right to remanufacture, only after the original manufacturer’spatent licensing, while the other firms can remanufacture used products. With theoptimization theory and method，this paper studies a special closed-loop supply chain ofthe patented products remanufacturing based on original manufacturer license otherfirms to remanufacture.This thesis has three parts. In the first part, we assume that new products andremanufactured products have no difference and establish single-cycle decision-makingmodel to study the patent license remanufacturing; In the second one, we assume thatnew products and remanufactured products are different and establish two-cycledecision-making model to study the patent license remanufacturing; Thirdly, we studythe patent licensing and government subsidies in the patent perfect market when theOEMs authorize the third-party remanufacturer to remanufacture.In the first part (Chapter III and Chapter IV), assuming new products andremanufactured products without difference, this paper study the supply chaindecision-making model and coordination mechanisms when the original manufacturerauthorize the distributor and third-party remanufacturer to remanufacture. Thebenchmark models what are no remanufacturing (N mode), and the originalmanufacturer remanufacturing (MR mode) were firstly discussed. Then we consider thatthe distributor and third-party has remanufacturing capacity. By using royalty licensing，this thesis establishes the special closed-loop supply chain decision-making modelswhich original manufacturer license distributor remanufacturing (RR mode) and licensethird-party remanufacturing (TR mode) in the patent perfect market.By the use of gametheory, the optimal decision and equilibrium profit are presented. The results show that remanufacturing of used products can increase profit of supply chain’s party when thenew products and remanufactured products make no difference in quality, no matterwhat the original manufacturers use which of the strategies. So the firms have themotivation to participate in the recycling of used products remanufacturing. Throughcomparing the profit， only remanufacturing cost of the distributor(third-partymanufacturer) is low enough, the original manufacturer would authorize thedistributor(third-party manufacturer) to remanufacture used product.In the second part (Chapter V and Chapter VI), this thesis assume that the newproducts and manufactured goods are different. Based on the remanufacturing costdifference and consumer heterogeneous, the original manufacturer by the patentprotection can adopt two strategies: no license remanufacturing and licenseremanufacturing, and establish the single period model without recovery number limitand two period models with recovery number limit respectively. In two-cycleclosed-loop supply chain model of the distributor remanufacturing，the results show thethe original manufacturer is willing to adopt the strategy of license manufacturer，butthe distributor is more willing to receive remanufacturing without license. Finally, arevenue and expense sharing contract (RAESC) is proposed to coordinate thepatents-related closed-loop supply chain different from the traditional revenue sharingcontract. In two-cycle closed-loop supply chain model of the remanufacturerremanufacturing， the results show that the original manufacturer can shareremanufacturing benefit through patent licensing fee in the case of licenseremanufacturing, so the original manufacturer is willing to adopt the strategy ofmanufacturer license; only when the cost savings is high enough in licenseremanufacturing, the remanufacturer will receive the patent licensing of the originalmanufacturer.In the third part (Chapter VII), the thesis analyzes two different strategies ofgovernment subsidies to remanufacturing of used products under patent protection,subsidies to the original manufacturer (GM mechanism) and direct subsidies to thethird-party manufacturer (GT mechanism), we establish closed-loop supply chain decentrealized model which the original manufacturer authorize the third-party remanufacturerto remanufacture used product. The results show that the retail price,wholesaleprice,return price and amount of used products are the same respectively under the twomechanisms when the patented product remanufacturing requires the authorization ofthe original manufacturer. The original manufacturer and the third-party manufacturer share the economic benefits of remanufacturing and government subsidies throughlicensing fee. It is found that efficiency is lost in the decentralized closed-loop supplychain, the centralized decision not only improved profits but also the consumers canbenefit from it. The revenue and expense sharing contract (RAESC) including threeparties is proposed to coordinate the closed-loop supply chain different from thetraditional revenue sharing contract.