Abstract
Remanufacturing has been an important research topic in green supply chain. However, few researches investigate how leasing impact remanufacturing. Traditionally, the quantity and quality of recycle products vary a lot because different customers use products differently both in terms of times possessed and the ways they treat the products. However, in the leasing contract, the leasing time is pre-determined. Often, the contract will require customers use products in a certain way. For example, car leasing contract usually has limitation on mileage. Therefore, the recycle products out of the leasing contract usually have less variation in quantity and quality. In this research, two stochastic optimization models are developed. They are Leasing and Non-leasing models. In the Leasing model, recycle quantity depends on the amount of leasing contracts few periods before. It is not an independent decision variable like it is in the Non-leasing model. Based on the inventory position and market demand, the company optimizes its decisions to maximize the total profit in the planning horizon. The steady state solutions are found and used to discuss how leasing impact the remanufacturing system. We found that under certain circumstances, leasing may have negative impact on the remanufacturing system.