Luk Van Wassenhove
Emeritus Professor of Technology and Operations Management
Visiting Professor of Technology and Operations Management at INSEAD
Closed-loop Supply Chain; Reverse Logistics;Remanufacturing;Channel Choice;
This note discusses the impact of collection cost structure on the optimal reverse channel choice of manufacturers who remanufacture their own products.Using collection cost functions that capture collection rate and collection volume dependency, the authors show that the optimal reverse channel choice (retailer- vs. manufacturer-managed collection) is driven by how the cost structure moderates the manufacturer's ability to shape the retailer's sales and collection quantity decisions.