A comparison of pure manufacturing and hybrid manufacturing–remanufacturing systems under carbon tax policy

Collection and remanufacturing of used products can be considered as one of the options to improve the sustainability of a manufacturing system. In this study, we focus on production and sustainability level decisions in pure manufacturing and hybrid manufacturing–remanufacturing systems and compare the systemwide performances and the performances of supply chain actors under different settings in terms of economic and environmental performance measures. We consider four settings as follows. In the first setting, no remanufacturing is made and only the manufactured products are sold via the retailer, whereas in the second, the third and the fourth settings, used products are collected and remanufactured by the manufacturer, the retailer and a third-party remanufacturer, respectively. Under all settings, we put the emissions resulting from the manufacturing and remanufacturing processes into account and consider one of the well-known emission policies, the carbon tax policy. We propose stylized models for the centralized and decentralized cases of each setting and analyze the decisions obtained under optimal or equilibrium solution. Based on our analysis, we observe that since the upper bound on the remanufacturing quantity depends on the manufacturing quantity, the manufacturer uses manufacturing quantity as a strategic power to compete with the retailer or the third-party remanufacturer. Moreover, in the same condition, the manufacturer always remanufactures less products compared to retailer or third-party remanufacturer since he considers the negative effect of remanufactured products on manufactured products.