Remanufacturing Closed-Loop Supply Chain Contract Coordination Considering Quality Control

Abstract

The quality control of remanufactured products in a closed-loop supply chain (CLSC) can significantly influence consumers’ decision-making, and the contract coordination of CLSC has also become a research hotspot. This paper explores the quality control problem in a three-level remanufacturing CLSC consisting of a remanufacturer, a retailer, and a recycler by constructing a system dynamics (SD) model, which contains two contract schemes: quality control contract and quality control–revenue-sharing contract. Subsequently, the proposed SD model is analyzed using various schemes. The findings suggest that without mandatory contracts, CLSC members are frequently unable to fulfill their quality improvement commitments. Among them, recyclers are less likely to improve quality and more prone to breaking promises. The quality control problem in CLSC can be addressed through contract coordination, and the quality control contract scheme can avoid non-compliance with quality improvement commitments. The application of the quality control–revenue-sharing combination contract scheme not only resolves the quality control issue but also promotes profit improvement in the CLSC.