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A model to evaluate acquisition price and quantity of used products for remanufacturing

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  • Pokharel, Shaligram
  • Liang, Yijiong
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    Abstract

    In this paper, an analytical model is proposed to evaluate optimal acquisition price and quantity policy based on the quality of returned used products that are subsequently used for remanufacturing. The model is developed from the perspective of a consolidation center, which facilitates the collection of used products in various collection centers by offering an acquisition price based on the quality of used products, receive all of the collected used products and consolidate them with replacement parts before sending the consignment to the remanufacturer. It is assumed that the consolidation center receives an order from the remanufacturer for a set quantity and an associated price for used products in a quality level. The consolidation center then evaluates optimal acquisition price and quantity policy for used products based on the available information on stochastic return quantity and quality, and the cost of predefined set of replacement parts. The policy so obtained is offered to the collection centers to initiate the collection of used products in their respective area of operation. The impact of the model is studied through a numerical study. The authors believe that the model developed here is the first such pricing model in a reverse logistics setting.

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    Bibliographic Info

    Article provided by Elsevier in its journal International Journal of Production Economics.

    Volume (Year): 138 (2012)
    Issue (Month): 1 ()
    Pages: 170-176

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    Handle: RePEc:eee:proeco:v:138:y:2012:i:1:p:170-176

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    Web page: http://www.elsevier.com/locate/ijpe

    Related research

    Keywords: Reverse logistics; Remanufacturing; Collection of used products; Pricing of used products;

    References

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    1. Ferrer, Geraldo & Ayres, Robert U., 2000. "The impact of remanufacturing in the economy," Ecological Economics, Elsevier, vol. 32(3), pages 413-429, March.
    2. Aras, Necati & Aksen, Deniz, 2008. "Locating collection centers for distance- and incentive-dependent returns," International Journal of Production Economics, Elsevier, vol. 111(2), pages 316-333, February.
    3. Wei, Cansheng & Li, Yongjian & Cai, Xiaoqiang, 2011. "Robust optimal policies of production and inventory with uncertain returns and demand," International Journal of Production Economics, Elsevier, vol. 134(2), pages 357-367, December.
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    16. Kumar, Sameer & Putnam, Valora, 2008. "Cradle to cradle: Reverse logistics strategies and opportunities across three industry sectors," International Journal of Production Economics, Elsevier, vol. 115(2), pages 305-315, October.
    17. Li, Jianzhi & Gonz√°lez, Miguel & Zhu, Yun, 2009. "A hybrid simulation optimization method for production planning of dedicated remanufacturing," International Journal of Production Economics, Elsevier, vol. 117(2), pages 286-301, February.
    18. Das, Kanchan & Chowdhury, Abdul H., 2012. "Designing a reverse logistics network for optimal collection, recovery and quality-based product-mix planning," International Journal of Production Economics, Elsevier, vol. 135(1), pages 209-221.
    19. Pellerin, Robert & Sadr, Javad & Gharbi, Ali & Malhamé, Roland, 2009. "A production rate control policy for stochastic repair and remanufacturing systems," International Journal of Production Economics, Elsevier, vol. 121(1), pages 39-48, September.
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    Cited by:
    1. Chen, Jen-Ming & Chang, Chia-I, 2013. "Dynamic pricing for new and remanufactured products in a closed-loop supply chain," International Journal of Production Economics, Elsevier, vol. 146(1), pages 153-160.
    2. Wu, Cheng-Han, 2012. "Price and service competition between new and remanufactured products in a two-echelon supply chain," International Journal of Production Economics, Elsevier, vol. 140(1), pages 496-507.
    3. Gernot Lechner & Marc Reimann, 2013. "The effect of active used product acquisition on manufacturing and remanufacturing strategies," Working Paper Series, Social and Economic Sciences 2013-01, Faculty of Social and Economic Sciences, Karl-Franzens-University Graz.

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