Outsourcing Decision-making Strategy for Collecting Used-products in Reverse Logistics

Recently outsourcing has emerged as a major issue in supply chain with remanufacturing. In this paper, we focus on the outsourcing decision-making strategy of collecting used-product for remanufacturing. Based on the review of large volume of literature, we develop three models for different collecting channel structurs (namely collected by the manufacturer, by the retailer, and by the third-party respectively). Moreover, this paper presents a quantitative methodology for manufacturer to make outsourcing decision, which aims at maximizing the manufacturer's profit. Finally a set of numerical examples are also presented to illustrate the sensitivity of the major variables ofthe models.