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Optimal Decisions in an Authorized Remanufacturing Closed-Loop Supply Chain under Dual-Fairness Concerns

Author

Listed:
  • Zichun Deng

    (Faculty of Business and Management, Universiti Teknologi MARA, Shah Alam 40450, Malaysia)

  • Mohd Rizaimy Shaharudin

    (Faculty of Business and Management, Universiti Teknologi MARA, Kedah Branch 08400, Malaysia)

  • S. Sarifah Radiah Shariff

    (Malaysia Institute of Transport, Universiti Teknologi MARA, Shah Alam 40450, Malaysia
    School of Mathematical Science Studies, College of Computing, Informatics and Mathematics, Universiti Teknologi MARA, Shah Alam 40450, Malaysia)

  • Ming-Lang Tseng

    (Institute of Innovation and Circular Economy, Asia University, Taichung 413, Taiwan
    Department of Medical Research, China Medical University Hospital, China Medical University, Taichung 413, Taiwan
    Graduate School of Business, UKM-Universiti Kebangsaan Malaysia, Bangi 43000, Malaysia)

Abstract

This paper studies optimal decisions in an authorized remanufacturing closed-loop supply chain (CLSC) consisting of a manufacturer, a retailer, and an authorized third-party remanufacturer with dual-fairness concerns (distributional fairness concerns and peer-induced fairness concerns). Four Stackelberg game models are developed: (i) the dual-fairness concerns are considered by the retailer (model F); (ii) the retailer does not consider both types of fairness concerns (model N); (iii) the retailer only considers the distributional fairness concerns (model D); (iv) the retailer only considers the peer-induced fairness concerns (model P). We use numerical analysis to examine the equilibrium outcomes under dual-fairness concerns. The results show that: (1) The increase in the coefficient of peer-induced fairness concerns will result in more profit for the manufacturer in most cases, while distributional fairness concerns always hurt the manufacturer; (2) In most parameter cases, the increase in the degree of distributional fairness concerns favors the retailer. The retailer considers only peer-induced fairness concerns when the degree of distributional fairness concerns is low and the degree of peer-induced fairness concerns is relatively high, whereas in other cases, two kinds of fairness concerns are ignored; (3) Model P is the most profitable and model D is most disadvantageous for the third party, however, for the manufacturer it is the opposite; (4) The impact of fairness concerns on the environment depends on the retailer’s attitude towards fairness concerns. Model P is the best for the environment, while model D has the highest environmental impact. This study introduces dual-fairness concerns into the authorized remanufacturing CLSC model and provides theoretical references for authorized remanufacturing and sustainability practices.

Suggested Citation

  • Zichun Deng & Mohd Rizaimy Shaharudin & S. Sarifah Radiah Shariff & Ming-Lang Tseng, 2024. "Optimal Decisions in an Authorized Remanufacturing Closed-Loop Supply Chain under Dual-Fairness Concerns," Sustainability, MDPI, vol. 16(17), pages 1-22, September.
  • Handle: RePEc:gam:jsusta:v:16:y:2024:i:17:p:7609-:d:1469898
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    References listed on IDEAS

    as
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