Operational Decisions on Remanufacturing Outsourcing Involved with Corporate Environmental and Social Responsibility—A Sustainable Perspective

Wei Yan, Junwu Chai, Zhifeng Qian, Sang-bing Tsai, Hong Chen, Yu Xiong

Research output: Contribution to journalArticlepeer-review

11 Citations (Scopus)
10 Downloads (Pure)

Abstract

Due to increasing consciousness of sustainability and pressure from legislation, numerous studies and managers have sought to integrate traditional operations management with green environment and social responsibility. One such effort is remanufacturing, which has emerged as a growing topic. Although outsourcing remanufacturing operations to third-party remanufacturers (TPRs) has been well studied in the literature, the research has paid little attention to the fact that original equipment manufacturers (OEMs) have the flexibility of outsourcing to other agents but not TPRs. In practice, besides TPRs, many brand-name OEMs have outsourced remanufacturing operations to their suppliers. The question this raises is: TPR vs. supplier, which remanufacturer is better for the economic, environment and social responsibility? To understand this fundamental question, in this paper, we develop two models that allow an OEM to have potential flexibility to (1) outsource remanufacturing operations to a TPR (Model T) or (2) outsource remanufacturing operations to a supplier (Model S). Among other results, we find that, although the Model T creates more potentially sustainable economic, social, and environmental situations, this strategy is not supported by the supplier because it always leaves the supplier worse off. In order to achieve a “win-win-win” outcome that meets economic, social, and environmental requirements for all parties, a revenue-sharing contract is proposed and incorporated into Model T.
Original languageEnglish
Pages (from-to)1132
JournalSustainability
Volume10
Issue number4
DOIs
Publication statusPublished - 10 Apr 2018

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