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Dynamic buy-back for product recovery in end-of-life spare parts procurement

  • Rainer Kleber

    ()

    (Faculty of Economics and Management, Otto-von-Guericke University Magdeburg)

  • Tobias Schulz

    ()

    (Faculty of Economics and Management, Otto-von-Guericke University Magdeburg)

  • Guido Voigt

    ()

    (Faculty of Economics and Management, Otto-von-Guericke University Magdeburg)

The efficient supply of spare parts is of prime concern for OEMs. Next to the traditional spare parts sources in form of final order and remanufacturing, the option to buy back broken products prevents the OEM from fulfilling his spare parts availability obligation in the end-of-life phase and increases his ability to remanufacture. This contribution seeks to identify optimal buy-back strategies for different settings regarding information availability and buy-back flexibility. A numerical study analyzes circumstances under which buy-back is especially beneficial for the OEM.

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File URL: http://www.ww.uni-magdeburg.de/fwwdeka/femm/a2009_Dateien/2009_26.pdf
File Function: First version, 2009
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Paper provided by Otto-von-Guericke University Magdeburg, Faculty of Economics and Management in its series FEMM Working Papers with number 09026.

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Length: 31 pages
Date of creation: Aug 2009
Date of revision:
Handle: RePEc:mag:wpaper:09026
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  1. Kennedy, W. J. & Wayne Patterson, J. & Fredendall, Lawrence D., 2002. "An overview of recent literature on spare parts inventories," International Journal of Production Economics, Elsevier, vol. 76(2), pages 201-215, March.
  2. Karl Inderfurth & Kampan Mukherjee, 2008. "Decision support for spare parts acquisition in post product life cycle," Central European Journal of Operations Research, Springer, vol. 16(1), pages 17-42, March.
  3. Kim, Bowon & Park, Sangsun, 2008. "Optimal pricing, EOL (end of life) warranty, and spare parts manufacturing strategy amid product transition," European Journal of Operational Research, Elsevier, vol. 188(3), pages 723-745, August.
  4. Esther Gal-Or, 1989. "Warranties as a Signal of Quality," Canadian Journal of Economics, Canadian Economics Association, vol. 22(1), pages 50-61, February.
  5. Saibal Ray & Tamer Boyaci & Necati Aras, 2005. "Optimal Prices and Trade-in Rebates for Durable, Remanufacturable Products," Manufacturing & Service Operations Management, INFORMS, vol. 7(3), pages 208-228, January.
  6. Huiskonen, Janne, 2001. "Maintenance spare parts logistics: Special characteristics and strategic choices," International Journal of Production Economics, Elsevier, vol. 71(1-3), pages 125-133, May.
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