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Pricing decisions in a multi-criteria setting for product recovery facilities

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  • Vadde, Srikanth
  • Zeid, Abe
  • Kamarthi, Sagar V.

Abstract

Unpredictability in the arrival time and quantity of discarded products at product recovery facilities (PRFs) and varying demand for recovered components contribute to the volatility in their inventory levels. Achieving profit under such capricious inventory levels and stringent environmental legislations remains a challenge to many PRFs. This paper presents a multi-criteria decision model to determine a pricing policy that can simultaneously address two issues: stabilize inventory fluctuations and boost profits. The model considers that PRFs passively accepts discarded products as well as acquires them proactively if necessary. Under a multi-criteria setting, the current work determines prices of reusable and recyclable components to maximize revenue and minimize product recovery costs. A genetic algorithm is employed to solve the multi-criteria decision making problem. Sensitivity analysis is performed to investigate the effect of sorting yield, disassembly yield, and reusable component yield on the profits, prices, inventory levels, and disposal quantities.

Suggested Citation

  • Vadde, Srikanth & Zeid, Abe & Kamarthi, Sagar V., 2011. "Pricing decisions in a multi-criteria setting for product recovery facilities," Omega, Elsevier, vol. 39(2), pages 186-193, April.
    • Handle: RePEc:eee:jomega:v:39:y:2011:i:2:p:186-193
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    Cited by:

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    3. Huihui Liu & Xiaohang Yue & Hui Ding & G. Keong Leong, 2017. "Optimal Remanufacturing Certification Contracts in the Electrical and Electronic Industry," Sustainability, MDPI, vol. 9(4), pages 1-17, March.
    4. Liu, Huihui & Lei, Ming & Deng, Honghui & Keong Leong, G. & Huang, Tao, 2016. "A dual channel, quality-based price competition model for the WEEE recycling market with government subsidy," Omega, Elsevier, vol. 59(PB), pages 290-302.
    5. Gan, Shu San & Pujawan, I. Nyoman & Suparno, & Widodo, Basuki, 2015. "Pricing decision model for new and remanufactured short-life cycle products with time-dependent demand," Operations Research Perspectives, Elsevier, vol. 2(C), pages 1-12.
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    7. Gan, Shu-San & Pujawan, I. Nyoman & Suparno, & Widodo, Basuki, 2017. "Pricing decision for new and remanufactured product in a closed-loop supply chain with separate sales-channel," International Journal of Production Economics, Elsevier, vol. 190(C), pages 120-132.
    8. Erzurumlu, S. Sinan, 2013. "The compatibility of durable goods with contingent generic consumables," Omega, Elsevier, vol. 41(3), pages 574-585.
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    10. Nakatani, Jun & Konno, Kiyoto & Moriguchi, Yuichi, 2017. "Variability-based optimal design for robust plastic recycling systems," Resources, Conservation & Recycling, Elsevier, vol. 116(C), pages 53-60.
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