Abstract
While the previous literature overlooks value-added service in a closed-loop supply chain (CLSC), we consider new research problems with embedding value-added service into remanufacturing models. In this paper, we mainly study the role of value-added service in a CLSC and investigate how the value-added service influences profits and other decision variables. Then, we evaluate the performance of the CLSC in different service structures, where a manufacturer or a retailer provide the value-added service. Systematic comparisons and numerical studies show that the supply chain is more effective when service is provided by a manufacturer rather than by a retailer. Also, value-added service improves the whole supply chain performance and plays a regulatory role in a CLSC and influences the decisions of supply chain members. We also show that while a service cost-sharing mechanism can only optimise rather than achieve the supply chain coordination, and the degree of optimisation depends on cost-sharing percentage, the two-part tariff contract can be an effective mechanism to coordinate decentralised service scenarios by generating the same supply chain performance in a centralised service architecture model.