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A model to evaluate acquisition price and quantity of used products for remanufacturing

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  • Pokharel, Shaligram
  • Liang, Yijiong

Abstract

In this paper, an analytical model is proposed to evaluate optimal acquisition price and quantity policy based on the quality of returned used products that are subsequently used for remanufacturing. The model is developed from the perspective of a consolidation center, which facilitates the collection of used products in various collection centers by offering an acquisition price based on the quality of used products, receive all of the collected used products and consolidate them with replacement parts before sending the consignment to the remanufacturer. It is assumed that the consolidation center receives an order from the remanufacturer for a set quantity and an associated price for used products in a quality level. The consolidation center then evaluates optimal acquisition price and quantity policy for used products based on the available information on stochastic return quantity and quality, and the cost of predefined set of replacement parts. The policy so obtained is offered to the collection centers to initiate the collection of used products in their respective area of operation. The impact of the model is studied through a numerical study. The authors believe that the model developed here is the first such pricing model in a reverse logistics setting.

Suggested Citation

  • Pokharel, Shaligram & Liang, Yijiong, 2012. "A model to evaluate acquisition price and quantity of used products for remanufacturing," International Journal of Production Economics, Elsevier, vol. 138(1), pages 170-176.
    • Handle: RePEc:eee:proeco:v:138:y:2012:i:1:p:170-176
    DOI: 10.1016/j.ijpe.2012.03.019
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    4. Gan, Shu-San & Pujawan, I. Nyoman & Suparno, & Widodo, Basuki, 2017. "Pricing decision for new and remanufactured product in a closed-loop supply chain with separate sales-channel," International Journal of Production Economics, Elsevier, vol. 190(C), pages 120-132.
    5. Liao, Haolan & Wu, Di & Wang, Yuhan & Lyu, Zeyu & Sun, Hongmei & Nie, Yongyou & He, He, 2022. "Impacts of carbon trading mechanism on closed-loop supply chain: A case study of stringer pallet remanufacturing," Socio-Economic Planning Sciences, Elsevier, vol. 81(C).
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    7. Zhigang Jiang & Shuo Zhu & Hua Zhang & Yanhong Wang, 2013. "Optimal Acquisition and Inventory Control for a Remanufacturing System," Discrete Dynamics in Nature and Society, Hindawi, vol. 2013, pages 1-7, October.
    8. Yue Tan & Chunxiang Guo, 2019. "Research on Two-Way Logistics Operation with Uncertain Recycling Quality in Government Multi-Policy Environment," Sustainability, MDPI, vol. 11(3), pages 1-18, February.
    9. Gönsch, Jochen, 2015. "A note on a model to evaluate acquisition price and quantity of used products for remanufacturing," International Journal of Production Economics, Elsevier, vol. 169(C), pages 277-284.
    10. Gunasekara, Lahiru & Robb, David J. & Zhang, Abraham, 2023. "Used product acquisition, sorting and disposition for circular supply chains: Literature review and research directions," International Journal of Production Economics, Elsevier, vol. 260(C).
    11. Fang, Chih-Chiang, 2020. "Optimal price and warranty decision for durable products in a competitive duopoly market," Reliability Engineering and System Safety, Elsevier, vol. 203(C).
    12. Rafael Diaz & Erika Marsillac, 2017. "Evaluating strategic remanufacturing supply chain decisions," International Journal of Production Research, Taylor & Francis Journals, vol. 55(9), pages 2522-2539, May.
    13. Sarker, Bhaba R., 2014. "Consignment stocking policy models for supply chain systems: A critical review and comparative perspectives," International Journal of Production Economics, Elsevier, vol. 155(C), pages 52-67.
    14. Zhu, Qinghua & Sarkis, Joseph & Lai, Kee-hung, 2015. "Reprint of “Supply chain-based barriers for truck-engine remanufacturing in China”," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 74(C), pages 94-108.
    15. Wu, Cheng-Han, 2015. "Strategic and operational decisions under sales competition and collection competition for end-of-use products in remanufacturing," International Journal of Production Economics, Elsevier, vol. 169(C), pages 11-20.
    16. Gan, Shu San & Pujawan, I. Nyoman & Suparno, & Widodo, Basuki, 2015. "Pricing decision model for new and remanufactured short-life cycle products with time-dependent demand," Operations Research Perspectives, Elsevier, vol. 2(C), pages 1-12.
    17. Kumar Jena, Sarat & Sarmah, S.P, 2014. "Price competition and co-operation in a duopoly closed-loop supply chain," International Journal of Production Economics, Elsevier, vol. 156(C), pages 346-360.
    18. Wang, Nengmin & He, Qidong & Jiang, Bin, 2019. "Hybrid closed-loop supply chains with competition in recycling and product markets," International Journal of Production Economics, Elsevier, vol. 217(C), pages 246-258.
    19. Zhitao Xu & Shaligram Pokharel & Adel Elomri, 2023. "An eco-friendly closed-loop supply chain facing demand and carbon price uncertainty," Annals of Operations Research, Springer, vol. 320(2), pages 1041-1067, January.
    20. 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.
    21. Liang Shen & Fei Lin & Yuyan Wang & Xin Su & Hua Li & Rui Zhou, 2022. "Advertising Decisions of Platform Supply Chains Considering Network Externalities and Fairness Concerns," Mathematics, MDPI, vol. 10(13), pages 1-21, July.
    22. Syed Abdul Rehman Khan & Danish Iqbal Godil & George Thomas & Muhammad Tanveer & Hafiz Muhammad Zia-ul-haq & Haider Mahmood, 2021. "The Decision-Making Analysis on End-of-Life Vehicle Recycling and Remanufacturing under Extended Producer Responsibility Policy," Sustainability, MDPI, vol. 13(20), pages 1-14, October.
    23. Chen, Jen-Ming & Chang, Chia-I, 2013. "Dynamic pricing for new and remanufactured products in a closed-loop supply chain," International Journal of Production Economics, Elsevier, vol. 146(1), pages 153-160.
    24. Wu, Cheng-Han, 2012. "Price and service competition between new and remanufactured products in a two-echelon supply chain," International Journal of Production Economics, Elsevier, vol. 140(1), pages 496-507.
    25. Mohsen Zamani & Mahdi Abolghasemi & Seyed Mohammad Seyed Hosseini & Mir Saman Pishvaee, 2019. "Considering pricing and uncertainty in designing a reverse logistics network," Papers 1909.11633, arXiv.org.

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