Multi-agent analysis of remanufacturing and leasing integration in closed-loop supply chains

Remanufacturing is a key strategy for implementing closed-loop supply chains, but its adoption faces challenges in controlling the end-of-life product reverse flows and achieving customer acceptance due to uncertain perceived quality. Leasing of products can address these issues, facilitating remanufacturing. Indeed, leasing allows the manufacturer to keep product ownership, facilitating the return of end-of-life products. Similarly, leasing alleviates customers from the burden of maintenance, potentially leading to higher customer acceptance. The integration of remanufacturing and leasing, referred to as “remanu-leasing”, involves three main stakeholders: the manufacturer, the customer, and the environment. While remanu-leasing can potentially align the interests of the manufacturer and customer, the overall benefit to all stakeholders is often overlooked. This paper investigates when remanu-leasing provides mutual benefits for all three parties. Mathematical models are developed to represent the objectives of each stakeholder. Using these models, various scenarios are generated to explore a wide range of outcomes. Key parameters influencing remanu-leasing success are identified, and decision trees are created for quick assessment of its viability. The results demonstrate that remanu-leasing benefits all stakeholders under specific conditions, even though they can be limited. The study reveals that remanu-leasing tends to be advantageous for the manufacturer and the environment when remanufacturing volumes and manufacturing preservation rates are low. For customers, remanu-leasing is preferred when the mean time to failure and leasing fees are low. These findings provide valuable insights for managers seeking to implement remanu-leasing, highlighting the key parameters to consider for enhancing its feasibility.