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<p>Allowing third-party remanufacturers (TPRs) to perform remanufacturing operations is a commonly adopted commercial practice whereby the original equipment manufacturer (OEM) outsources the remanufacturing operations to an outsourced remanufacturer (UR) or authorizes remanufacturing to an authorized remanufacturer (AR). However, no scholars have yet introduced TPRs’ process innovation to reduce remanufacturing costs under third-party remanufacturing (3PR) modes. Our study is the first attempt to introduce the process innovation for remanufacturing (PIR) into the outsourced and authorized remanufacturing modes. We examine the optimal investment decisions of channel members under the two remanufacturing modes and the OEM’s choice of remanufacturing mode. The main results show that URs are more willing to conduct self-investment under the outsourced mode. However, under the authorized remanufacturing mode, there is a conflict between OEMs and ARs in the choice of investment strategy. For a given investment strategy, we identify the two parties’ respective preferences for the 3PR mode. From the supply chain (SC) perspective, the OEM’s choice to invest in PIR results in higher profits under the authorized mode because (i) the PIR’s cost coefficient is small or (ii) the PIR’s cost coefficient is large and the production cost of the new product is low.</p>

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Optimal process innovation levels and operational decisions under the outsourced and authorized remanufacturing modes

  • 期刊论文

  • 发表日期：

    2026年5月21日

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  • Peng Ma,
  • Chen Li,
  • Henry Xu,
  • Yuzhuo Qiu

摘要

Allowing third-party remanufacturers (TPRs) to perform remanufacturing operations is a commonly adopted commercial practice whereby the original equipment manufacturer (OEM) outsources the remanufacturing operations to an outsourced remanufacturer (UR) or authorizes remanufacturing to an authorized remanufacturer (AR). However, no scholars have yet introduced TPRs’ process innovation to reduce remanufacturing costs under third-party remanufacturing (3PR) modes. Our study is the first attempt to introduce the process innovation for remanufacturing (PIR) into the outsourced and authorized remanufacturing modes. We examine the optimal investment decisions of channel members under the two remanufacturing modes and the OEM’s choice of remanufacturing mode. The main results show that URs are more willing to conduct self-investment under the outsourced mode. However, under the authorized remanufacturing mode, there is a conflict between OEMs and ARs in the choice of investment strategy. For a given investment strategy, we identify the two parties’ respective preferences for the 3PR mode. From the supply chain (SC) perspective, the OEM’s choice to invest in PIR results in higher profits under the authorized mode because (i) the PIR’s cost coefficient is small or (ii) the PIR’s cost coefficient is large and the production cost of the new product is low.