Coordinate the environmental and economic sustainability in a closed-loop supply chain

Abstract

This paper investigates the selection of authorization models and remanufacturing strategies within a closed-loop supply chain, focusing on environmental and economic sustainability. We develop four authorization models to represent different remanufacturing authorization scenarios and determine optimal operational strategies. The analysis further examines model selection preferences and sustainable decision-making processes among various supply chain stakeholders. Our findings demonstrate a strong manufacturer preference for authorizing recyclers. The study identifies an “optimal fixed authorization fee interval” that enables manufacturers and recyclers to achieve a balance between economic and environmental sustainability. Notably, the research reveals a “remanufacturing-environmental sustainability dilemma”, highlighting the fact that remanufacturing is not always environmentally beneficial.