Even though many manufacturers integrate remanufacturing into existing business models, it should be noted that such efforts are usually accompanied by a major concern for cannibalization of new product sales from remanufactured products. To deal with this problem, many manufacturers, such as Dell, adopt a "two-roof policy" where the sale of new products takes place in a store and their remanufactured products in another. However, in contrast, some manufacturers, including Apple and HP, adopt a "one-roof policy", by which all new and remanufactured products are sold through one store/chain. Although the literature on remanufacturing has extensively addressed sustainability issues within operations management, little attention has been paid to how "differentiated roof policy" for the marketing of remanufactured products affects sustainability issues. To fill this gap, in this paper, the authors develop two theoretical models in which manufacturers have the flexibility to distribute new and remanufactured products (1) through a one-roof policy (Model O) or (2) through a two-roof policy (Model T), respectively, and strive to address the question of how differentiated roof policies impact sustainability issues related to remanufacturing operations. Among other results, the central result suggests that, if the manufacturers care about economic performance, distributing both products through a two-roof policy is an advantageous strategy. Conversely, if they care about environmental sustainability, one roof is the preferred strategy.
Numerous studies on supply chains have indicated that vertical strategic interactions usually involve the classical double marginalization problem, leading to a downward distortion in profitability. However, at present, the implications of vertical strategic interactions for green technology investment in a supply chain are not all that clear. In particular, such a vertical interaction not only can translate into profits between different parties, but usually also involves differentiated environmental performance. A question which arises is: who is the right undertaker for green technology investment in a supply chain, the supplier or retailer? To answer this question, we highlight the implications of vertical strategic interaction for green technology investment in a supply chain. To fill this gap, using a game-theoretic approach, we formulate two models: (a) Model M, in which an upstream manufacturer adopts technologies to meet consumer demand; and (b) Model R, where a retailer integrates environmental concerns into their supply chain decisions. We find that the retailer, who is closer to the customer, is the more effective undertaker for green technology investment, as this not only creates higher profitability for both parties, but also achieves a more sustainable scheme for our environment. When green technologies are invested in by the manufacturer, the double marginalization effect not only may downward-distort their economic performance but can also reduce the equilibrium of product greenness.
scite is a Brooklyn-based organization that helps researchers better discover and understand research articles through Smart Citations–citations that display the context of the citation and describe whether the article provides supporting or contrasting evidence. scite is used by students and researchers from around the world and is funded in part by the National Science Foundation and the National Institute on Drug Abuse of the National Institutes of Health.