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An analytical model for reverse automotive production planning and pricing

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  • Qu, Xiuli
  • Williams, Julie Ann Stuart

Abstract

Automotive shredders need a reverse production planning strategy that includes determining at what price to purchase vehicle hulks from different sources. In this paper, we formulate the automotive reverse production planning and pricing problem in a nonlinear programming model, develop an approximate supply function for hulks when adjacent shredders price independently, and compare two hulk pricing strategies in three trends for ferrous metal and hulk prices: constant, increasing and decreasing. The case study results indicate that adjusting purchase price based on hulk composition in coordination with planning for purchasing, storing and processing can increase net revenue by 7-15%.

Suggested Citation

  • Qu, Xiuli & Williams, Julie Ann Stuart, 2008. "An analytical model for reverse automotive production planning and pricing," European Journal of Operational Research, Elsevier, vol. 190(3), pages 756-767, November.
    • Handle: RePEc:eee:ejores:v:190:y:2008:i:3:p:756-767
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    1. Geoffrey J. D. Hewings & Michael Sonis & David Boyce (ed.), 2002. "Trade, Networks and Hierarchies," Advances in Spatial Science, Springer, number 978-3-662-04786-6, February.
    2. Nagurney, Anna & Toyasaki, Fuminori, 2005. "Reverse supply chain management and electronic waste recycling: a multitiered network equilibrium framework for e-cycling," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 41(1), pages 1-28, January.
    3. Williams, J.A.S. & Wongweragiat, S. & Qu, X. & McGlinch, J.B. & Bonawi-tan, W. & Choi, J.K. & Schiff, J., 2007. "An automotive bulk recycling planning model," European Journal of Operational Research, Elsevier, vol. 177(2), pages 969-981, March.
    4. Frank Giarratani & Gene Gruver & Craig Richmond, 2002. "The US Regional Ferrous Scrap Model," Advances in Spatial Science, in: Geoffrey J. D. Hewings & Michael Sonis & David Boyce (ed.), Trade, Networks and Hierarchies, chapter 9, pages 159-175, Springer.
    5. Jacqueline A. Isaacs & Surendra M. Gupta, 1997. "Economic Consequences of Increasing Polymer Content for the U.S. Automobile Recycling Infrastructure," Journal of Industrial Ecology, Yale University, vol. 1(4), pages 19-33, October.
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    Cited by:

    1. Shi, Jianmai & Zhang, Guoqing & Sha, Jichang, 2011. "Optimal production and pricing policy for a closed loop system," Resources, Conservation & Recycling, Elsevier, vol. 55(6), pages 639-647.
    2. Simic, Vladimir & Dimitrijevic, Branka, 2012. "Production planning for vehicle recycling factories in the EU legislative and global business environments," Resources, Conservation & Recycling, Elsevier, vol. 60(C), pages 78-88.
    3. Ferrer, Geraldo & Swaminathan, Jayashankar M., 2010. "Managing new and differentiated remanufactured products," European Journal of Operational Research, Elsevier, vol. 203(2), pages 370-379, June.
    4. Suzanne, Elodie & Absi, Nabil & Borodin, Valeria, 2020. "Towards circular economy in production planning: Challenges and opportunities," European Journal of Operational Research, Elsevier, vol. 287(1), pages 168-190.
    5. Seyed Ahmad Yazdian & Kamran Shahanaghi & Ahmad Makui, 2016. "Joint optimisation of price, warranty and recovery planning in remanufacturing of used products under linear and non-linear demand, return and cost functions," International Journal of Systems Science, Taylor & Francis Journals, vol. 47(5), pages 1155-1175, April.
    6. T. V. Krishna Mohan & R. K. Amit, 2020. "Dismantlers’ dilemma in end-of-life vehicle recycling markets: a system dynamics model," Annals of Operations Research, Springer, vol. 290(1), pages 591-619, July.
    7. Simic, Vladimir & Dimitrijevic, Branka, 2013. "Risk explicit interval linear programming model for long-term planning of vehicle recycling in the EU legislative context under uncertainty," Resources, Conservation & Recycling, Elsevier, vol. 73(C), pages 197-210.
    8. Dinler, Esra & Güngör, Zülal, 2017. "Planning decisions for recycling products containing hazardous and explosive substances: A fuzzy multi-objective model," Resources, Conservation & Recycling, Elsevier, vol. 117(PB), pages 93-101.
    9. Simic, Vladimir, 2015. "A two-stage interval-stochastic programming model for planning end-of-life vehicles allocation under uncertainty," Resources, Conservation & Recycling, Elsevier, vol. 98(C), pages 19-29.
    10. Tian, Xiaoyu & Zhang, Zhi-Hai, 2019. "Capacitated disassembly scheduling and pricing of returned products with price-dependent yield," Omega, Elsevier, vol. 84(C), pages 160-174.
    11. Lu, Liang & Qi, Xiangtong & Liu, Zhixin, 2014. "On the cooperation of recycling operations," European Journal of Operational Research, Elsevier, vol. 233(2), pages 349-358.
    12. Jisoo Oh & Bongju Jeong, 2014. "Profit Analysis and Supply Chain Planning Model for Closed-Loop Supply Chain in Fashion Industry," Sustainability, MDPI, vol. 6(12), pages 1-30, December.
    13. Wu, Cheng-Han, 2013. "OEM product design in a price competition with remanufactured product," Omega, Elsevier, vol. 41(2), pages 287-298.

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