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Manufacturing and remanufacturing strategies under uncertain product demand

Author

Listed:
  • Marc Reimann

    (Institute of Production and Operations Management, Karl-Franzens-University Graz)

  • Gernot Lechner

    (Institute of Production and Operations Management, Karl-Franzens-University Graz)

Abstract

Effective and efficient closed-loop supply chain processes can constitute a significant competitive edge for companies. However, the integration of forward and reverse processes poses some challenges both on the supply side - e.g. availability of remanufacturable products - and on the demand side, e.g. cannibalization between new and remanufactured products. In this paper a model for studying supply side interactions is presented. In a two-period setting with uncertain demand a newsvendor-type approach is used to characterize the optimal production and remanufacturing policies. The main emphasis is on the link between production and sales of new products and the resulting subsequent supply of used products. Further, the issue of storing excess production is addressed and the substitution effect between inventories and remanufacturable products is quantified.

Suggested Citation

  • Marc Reimann & Gernot Lechner, 2011. "Manufacturing and remanufacturing strategies under uncertain product demand," Working Paper Series, Social and Economic Sciences 2011-02, Faculty of Social and Economic Sciences, Karl-Franzens-University Graz.
  • Handle: RePEc:grz:wpsses:2011-02
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    File URL: https://static.uni-graz.at/fileadmin/sowi/Working_Paper/2011-02_Reimann_Lechner.pdf
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    Cited by:

    1. Choi, Tsan-Ming & Li, Yongjian & Xu, Lei, 2013. "Channel leadership, performance and coordination in closed loop supply chains," International Journal of Production Economics, Elsevier, vol. 146(1), pages 371-380.

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