Acceptance-threshold and remanufacturing decisions under returned-core quality uncertainty

Purpose This paper investigates how a manufacturer should set the acceptance threshold for returned cores under quality uncertainty when returned-core supply is limited. It examines whether stricter quality screening necessarily improves profitability and whether remanufacturing always enhances environmental performance. Design/methodology/approach We develop a supplier–manufacturer Stackelberg game in which the supplier sets the wholesale price of new cores and the manufacturer endogenously determines the acceptance threshold for returned cores, together with the production quantities of new and remanufactured products. The model captures the trade-off between accepted-core quality and accepted-core availability and incorporates carbon-emission accounting. Findings A stricter acceptance threshold improves the average quality of accepted cores and lowers the average remanufacturing cost, but it also reduces accepted-core availability. Therefore, the optimal threshold depends critically on returned-core market size. When accepted-core supply is sufficiently abundant, new-core procurement is relatively costly, and consumers sufficiently value remanufactured products, the manufacturer may shift from mixed production to exclusive remanufacturing. However, relaxing the threshold to expand remanufacturing does not always improve environmental performance, because the induced output expansion can increase total carbon emissions. Originality/value This paper contributes to the remanufacturing literature by jointly analyzing endogenous acceptance-threshold decisions, returned-core market size, upstream–downstream strategic interaction, and explicit carbon emissions in a unified game-theoretic framework. It shows that acceptance-threshold design is not merely a technical screening rule, but a strategic lever that shapes profitability, product structure, supplier dependence, and environmental performance under returned-core quality uncertainty.