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Impact of product proliferation on the reverse supply chain

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  • Huang, Shui-Mu
  • Su, Jack C.P.

Abstract

Product variety is one of the most important advantages in highly competitive markets. However, excessive product proliferation's reducing the profit margin has caused increased focus on developing a management method for maximal profit. In a closed-loop supply chain, product proliferation affects the reverse supply chain as well as the forward supply chain. Although increasing the number of product types can better satisfy diverse customer needs, complexity in the product recycling, remanufacturing, and resale processes may erode a firm's overall profits. In this study, we develop a mathematical model for analyzing a capacitated reverse supply chain consisting of a single manufacturer and multiple retailers. We reveal closed-form solutions for the optimal batch size and maximal profit, and discuss managerial insights into how the number of products and other factors can affect both batch size and profit. Finally, we investigate the relationship between product proliferation and the choice of logistics strategy.

Suggested Citation

  • Huang, Shui-Mu & Su, Jack C.P., 2013. "Impact of product proliferation on the reverse supply chain," Omega, Elsevier, vol. 41(3), pages 626-639.
    • Handle: RePEc:eee:jomega:v:41:y:2013:i:3:p:626-639
    DOI: 10.1016/j.omega.2012.08.003
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    4. Vahdani, Behnam & Mohammadi, M., 2015. "A bi-objective interval-stochastic robust optimization model for designing closed loop supply chain network with multi-priority queuing system," International Journal of Production Economics, Elsevier, vol. 170(PA), pages 67-87.
    5. Menezes, Mozart B.C. & Jalali, Hamed & Lamas, Alejandro, 2021. "One too many: Product proliferation and the financial performance in manufacturing," International Journal of Production Economics, Elsevier, vol. 242(C).
    6. Agrawal, Saurabh & Singh, Rajesh K. & Murtaza, Qasim, 2015. "A literature review and perspectives in reverse logistics," Resources, Conservation & Recycling, Elsevier, vol. 97(C), pages 76-92.

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