Joint optimization of new production, warranty servicing strategy and secondary market supply under consumer returns
AbstractIn this paper, we consider an OEM selling new products to the market offering (i) a warranty period during which defective units are dealt with at no cost for the customer, and (ii) a full refund to customers who return products that do not meet their expectations (consumer returns). The manufacturer has different options for satisfying the warranty cases as well as for utilizing the consumer returns. Warranty cases could be dealt with by repairing the defective units, replacing them with new products, or replacing them with refurbished consumer returns. Alternatively leftover new products or consumer returns can also be sold on a secondary market. We develop a model and derive the OEMs optimal decisions with respect to these options under demand uncertainty on the primary market.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Faculty of Social and Economic Sciences, Karl-Franzens-University Graz in its series Working Paper Series, Social and Economic Sciences with number 2013-03.
Length: 25 pages
Date of creation: 02 Mar 2013
Date of revision:
Contact details of provider:
Postal: Universitaetsstrasse 15/AE, 8010 Graz
Web page: http://sowi.uni-graz.at/de/forschen/working-paper-series/
More information through EDIRC
This paper has been announced in the following NEP Reports:
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Murthy, D. N. P. & Blischke, W. R., 1992. "Product warranty management -- III: A review of mathematical models," European Journal of Operational Research, Elsevier, vol. 63(1), pages 1-34, November.
- Jeffrey D. Shulman & Anne T. Coughlan & R. Canan Savaskan, 2009. "Optimal Restocking Fees and Information Provision in an Integrated Demand-Supply Model of Product Returns," Manufacturing & Service Operations Management, INFORMS, vol. 11(4), pages 577-594, December.
- V. Daniel R. Guide , Jr. & Gilvan C. Souza & Luk N. Van Wassenhove & Joseph D. Blackburn, 2006. "Time Value of Commercial Product Returns," Management Science, INFORMS, vol. 52(8), pages 1200-1214, August.
- Zuo, Ming J. & Liu, Bin & Murthy, D. N. P., 2000. "Replacement-repair policy for multi-state deteriorating products under warranty," European Journal of Operational Research, Elsevier, vol. 123(3), pages 519-530, June.
- Murthy, D. N. P. & Djamaludin, I., 2002. "New product warranty: A literature review," International Journal of Production Economics, Elsevier, vol. 79(3), pages 231-260, October.
- Inderfurth, K. & de Kok, A. G. & Flapper, S. D. P., 2001. "Product recovery in stochastic remanufacturing systems with multiple reuse options," European Journal of Operational Research, Elsevier, vol. 133(1), pages 130-152, August.
- Mark Ferguson & V. Daniel R. Guide , Jr. & Gilvan C. Souza, 2006. "Supply Chain Coordination for False Failure Returns," Manufacturing & Service Operations Management, INFORMS, vol. 8(4), pages 376-393, August.
- Blischke, W. R. & Murthy, D. N. P., 1992. "Product warranty management -- I: A taxonomy for warranty policies," European Journal of Operational Research, Elsevier, vol. 62(2), pages 127-148, October.
- Yalabik, Baris & Petruzzi, Nicholas C. & Chhajed, Dilip, 2005. "An integrated product returns model with logistics and marketing coordination," European Journal of Operational Research, Elsevier, vol. 161(1), pages 162-182, February.
- Roland Geyer & Luk N. Van Wassenhove & Atalay Atasu, 2007. "The Economics of Remanufacturing Under Limited Component Durability and Finite Product Life Cycles," Management Science, INFORMS, vol. 53(1), pages 88-100, January.
- Khouja, Moutaz, 1999. "The single-period (news-vendor) problem: literature review and suggestions for future research," Omega, Elsevier, vol. 27(5), pages 537-553, October.
- Jeffrey D. Shulman & Anne T. Coughlan & R. Canan Savaskan, 2011. "Managing Consumer Returns in a Competitive Environment," Management Science, INFORMS, vol. 57(2), pages 347-362, February.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Editorial team).
If references are entirely missing, you can add them using this form.