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What is the role of value-added service in a remanufacturing closed-loop supply chain?

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  • Xianpei Hong
  • Lan Wang
  • Yeming Gong
  • Wanying (Amanda) Chen

Abstract

While the previous literature overlooks value-added service in a closed-loop supply chain (CLSC), we consider new research problems with embedding value-added service into remanufacturing models. In this paper, we mainly study the role of value-added service in a CLSC and investigate how the value-added service influences profits and other decision variables. Then, we evaluate the performance of the CLSC in different service structures, where a manufacturer or a retailer provide the value-added service. Systematic comparisons and numerical studies show that the supply chain is more effective when service is provided by a manufacturer rather than by a retailer. Also, value-added service improves the whole supply chain performance and plays a regulatory role in a CLSC and influences the decisions of supply chain members. We also show that while a service cost-sharing mechanism can only optimise rather than achieve the supply chain coordination, and the degree of optimisation depends on cost-sharing percentage, the two-part tariff contract can be an effective mechanism to coordinate decentralised service scenarios by generating the same supply chain performance in a centralised service architecture model.

Suggested Citation

  • Xianpei Hong & Lan Wang & Yeming Gong & Wanying (Amanda) Chen, 2020. "What is the role of value-added service in a remanufacturing closed-loop supply chain?," International Journal of Production Research, Taylor & Francis Journals, vol. 58(11), pages 3342-3361, June.
  • Handle: RePEc:taf:tprsxx:v:58:y:2020:i:11:p:3342-3361
    DOI: 10.1080/00207543.2019.1702230
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    Cited by:

    1. Guo, Xiaolong & Zhou, Qiang & Bian, Junsong, 2022. "Online retailers’ platform-based Worry-Free-Shopping: Retailing strategy considering consumer valuation bias," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 167(C).
    2. Yang, Feng & Wang, Manman & Ang, Sheng, 2021. "Optimal remanufacturing decisions in supply chains considering consumers’ anticipated regret and power structures," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 148(C).
    3. Yanbin Du & Guohua He & Bo Li & Zhijie Zhou & Guoao Wu, 2022. "In-service machine tool remanufacturing: a sustainable resource-saving and high-valued recovery approach," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 24(1), pages 1335-1358, January.
    4. Shiming Yi & Liying Yu & Ziyuan Zhang, 2020. "Research on Pricing Strategy of Dual-Channel Supply Chain Based on Customer Value and Value-Added Service," Mathematics, MDPI, vol. 9(1), pages 1-19, December.
    5. Yong Wang & Xudong Deng & Qian Lu & Mingke Guan & Fen Lu & Xiaochang Wu, 2023. "Developing Platform Supply Chain Contract Coordination and a Numerical Analysis Considering Fresh-Keeping Services," Sustainability, MDPI, vol. 15(18), pages 1-20, September.
    6. Niu, Baozhuang & Bao, Jinxiao & Cao, Bin, 2022. "Retailer's make-or-buy decision for remanufactured products under in-house yield uncertainty," Omega, Elsevier, vol. 110(C).
    7. Ren, Ting-hai & Zeng, Neng-min & Wang, Da-fei & Yuan, Kai-fu, 2023. "Authorization or encroachment: Effects of channel encroachment on decisions and performance in software service supply chains," International Journal of Production Economics, Elsevier, vol. 257(C).
    8. Liu, Zhi & Li, Kevin W. & Tang, Juan & Gong, Bengang & Huang, Jun, 2021. "Optimal operations of a closed-loop supply chain under a dual regulation," International Journal of Production Economics, Elsevier, vol. 233(C).
    9. Tianjian Yang & Chunmei Li & Xiongping Yue & Beibei Zhang, 2022. "Decisions for Blockchain Adoption and Information Sharing in a Low Carbon Supply Chain," Mathematics, MDPI, vol. 10(13), pages 1-23, June.

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