Operational decisions for remanufactured products in a sustainable supply chain

Manufacturers conduct business operations by producing new and remanufactured products. In practice, two different channel selection models are involved in the reverse supply chain: (1) Model P: The manufacturer provides new and remanufactured products to two retailers, respectively. New products are sold through a retailer R1, while remanufactured products are sold through another retailer R2 in a pre-competitive scenario; and (2) Model C: The manufacturer provides new and remanufactured units to only one retailer (retailer R) in a competitive scenario. This research results showed that a manufacturer’s profitability and industry profits in Model P were higher than those in Model C from the perspective of economic performance; the sum of the profits of both the retailers in Model P was worse than the profits of the retailer in Model C. In addition, Model P was found to be greener than Model C from the perspective of environmental sustainability. From a social viewpoint, Model P had a higher consumer surplus than Model C; the higher the cost of distributing a remanufactured unit, the more disadvantageous the model was to the consumers. It is helpful to address the problem of sustainable development in three dimensions: society, economy and environment.