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Received May 10, 2017; Accepted Nov 7, 2017
This is an open access article distributed under the Creative Commons Attribution License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.
1. Introduction
Nowadays, the importance of the environmental performance and sustainable development is being recognized. In order to reduce environmental pollution and enhance the resource utilization, we push forward the stable development of closed-loop supply chain systems with production remanufacturing. Remanufacturing recovers value from used products to bring the product to like-new condition. Examples from industry show that the quality of remanufactured products is as good as or better than that of the new products; hence they can be sold in the same market. In this paper, we assume that there is no distinction between a new and a remanufactured product.
Our paper relates to several streams of literature; we review them one by one in the following.
The research on the reverse logistics management issues for remanufactured products has received a considerable amount of attention in the past few years. We refer to Fleischmann et al. [1] and Guide Jr. et al. [2] for complete reviews. Most of these research papers use game theory to model remanufacturing decisions [3–6], inventory control [7–9], and collection structures [10–13].
With the rapid development of Internet, a large number of firms have established avenues for selling direct to consumers (e.g., IBM, Nike, Kodak, and Dell). A manufacturer has the right to choose whatever distribution channels he desires and usually takes dual channel as a tool to create more demand. Consumers purchase products based on price and channel preference. Many works regard the Internet channel as the second distribution channel. Liu and Xiong [14] demonstrate the channel model where the new products are sold through the retailer, while the remanufactured products are sold through the direct channel. And then they obtain the price strategy. Wang et al. [15] model the channel structure for marketing the remanufactured products. They find that the subsidy...