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Optimal pricing and production decisions in utilizing reusable containers

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  • Atamer, Büşra
  • Bakal, İsmail S.
  • Bayındır, Z. Pelin

Abstract

In this study, we focus on pricing and production decisions in utilizing reusable containers with stochastic customer demand. We consider a manufacturer that sells a single product to the customers in reusable containers with two supply options: (i) brand-new containers and (ii) returned containers from customers. The return quantity depends on both customer demand and the acquisition fee determined by the manufacturer. The unit cost of production using brand-new containers is different than the unit cost of reusing returned containers. The customers are indifferent between brand-new and recovered products. We also consider resource restrictions on the production operations. In this setting, we investigate the optimal pricing and production decisions in order to maximize the manufacturer's profit. We characterize the optimal acquisition fee and the optimal order quantity of brand-new containers analytically and investigate the effect of parameters through an extensive computational study.

Suggested Citation

  • Atamer, Büşra & Bakal, İsmail S. & Bayındır, Z. Pelin, 2013. "Optimal pricing and production decisions in utilizing reusable containers," International Journal of Production Economics, Elsevier, vol. 143(2), pages 222-232.
    • Handle: RePEc:eee:proeco:v:143:y:2013:i:2:p:222-232
    DOI: 10.1016/j.ijpe.2011.08.007
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    References listed on IDEAS

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    Cited by:

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    2. Tianji Yang & Chao Fu & Xinbao Liu & Jun Pei & Lin Liu & Panos M. Pardalos, 2018. "Closed-loop supply chain inventory management with recovery information of reusable containers," Journal of Combinatorial Optimization, Springer, vol. 35(1), pages 266-292, January.
    3. Meherishi, Lavanya & Narayana, Sushmita A. & Ranjani, K.S., 2021. "Integrated product and packaging decisions with secondary packaging returns and protective packaging management," European Journal of Operational Research, Elsevier, vol. 292(3), pages 930-952.
    4. Wang, Qifei & Li, Jianbin & Yan, Hong & Zhu, Stuart X., 2016. "Optimal remanufacturing strategies in name-your-own-price auctions with limited capacity," International Journal of Production Economics, Elsevier, vol. 181(PA), pages 113-129.
    5. Wang, Qifei & Hong, Xianpei & Gong, Yeming (Yale) & Chen, Wanying (Amanda), 2020. "Collusion or Not: The optimal choice of competing retailers in a closed-loop supply chain," International Journal of Production Economics, Elsevier, vol. 225(C).
    6. Jian Wang & Wenxuan Shao, 2021. "Joint Capacity Investment, Collecting and Pricing Decisions in a Capacity Constraint Closed-Loop Supply Chain Considering Cooperation," Sustainability, MDPI, vol. 13(16), pages 1-28, August.
    7. Yanqi Zhang & Xiaofei Kou & Haibin Liu & Shiqing Zhang & Liangliang Qie, 2022. "IoT-Enabled Sustainable and Cost-Efficient Returnable Transport Management Strategies in Multimodal Transport Systems," Sustainability, MDPI, vol. 14(18), pages 1-22, September.
    8. Pal, Shilpi & Mahapatra, G.S. & Samanta, G.P., 2014. "An EPQ model of ramp type demand with Weibull deterioration under inflation and finite horizon in crisp and fuzzy environment," International Journal of Production Economics, Elsevier, vol. 156(C), pages 159-166.
    9. Elia, Valerio & Gnoni, Maria Grazia, 2015. "Designing an effective closed loop system for pallet management," International Journal of Production Economics, Elsevier, vol. 170(PC), pages 730-740.
    10. Ata Allah Taleizadeh & Mahsa Noori-daryan & Kannan Govindan, 2016. "Pricing and ordering decisions of two competing supply chains with different composite policies: a Stackelberg game-theoretic approach," International Journal of Production Research, Taylor & Francis Journals, vol. 54(9), pages 2807-2836, May.
    11. 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.

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