Remanufacturing strategy in decentralised supply chains with contract manufacturing and self-branding

Growing interest in remanufacturing has shifted competitive dynamics in supply chains, dividing revenues among participating enterprises. This study investigates the strategic implications of remanufacturing in a decentralised supply chain composed of two original equipment manufacturers (OEMs), a competitive contract manufacturer (CCM) that produces both contract and self-branded products, and a non-contract manufacturer (NCM). Four analytical models are created to describe various structural configurations: one without remanufacturing and three decentralised models in which separate members undertake remanufacturing. To determine equilibrium pricing, production and profit outcomes, a game-theoretic framework is utilised in conjunction with numerical and sensitivity analysis. The results show that remanufacturing consistently improves the profitability of the member conducting it, while reducing the profits of other firms due to substitution between new and remanufactured products. Among the models, Model I emerges as the most balanced structure, as the lower quality of remanufactured products softens competition and limits losses for other members.