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Reverse-Logistics Strategy for Product Take-Back

Author

Listed:
  • Markus Klausner

    (Corporate Research and Development, Department of Information and Systems Technology, Robert Bosch GmbH, Box 10 60 50, 70049 Stuttgart, Germany)

  • Chris T. Hendrickson

    (Department of Civil and Environmental Engineering, Carnegie Mellon University, Pittsburgh, Pennsylvania 15213-3890)

Abstract

Product take-back of consumer products is generally expensive, especially reverse logistics. In the take-back program for power tools in Germany, costs exceed revenues for recycling power tools. Systematic analysis of take-back alternatives can make take-back policies more attractive. For example, an alternative take-back system for power tools would combine profitable remanufacturing and unprofitable materials recycling. The profit from remanufacturing could cover the loss from recycling as well as the costs of reverse logistics, allowing the manufacturer a profit. Remanufacturing requires a continuous flow of returned postconsumer products. By buying back end-of-life products, firms could control the flow of returned products. We developed a model that allows us to determine the optimal amount to spend on buy-back and the optimal unit cost of reverse logistics. We can use the latter to select a suitable reverse-logistics system for end-of-life products. We apply our model to the remanufacturing take-back concept for power tools, using empirical data on the current take-back program.

Suggested Citation

  • Markus Klausner & Chris T. Hendrickson, 2000. "Reverse-Logistics Strategy for Product Take-Back," Interfaces, INFORMS, vol. 30(3), pages 156-165, June.
    • Handle: RePEc:inm:orinte:v:30:y:2000:i:3:p:156-165
    DOI: 10.1287/inte.30.3.156.11657
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    Keywords

    ENVIRONMENT; INDUSTRIES—MACHINERY;

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