Recovery-channel selection in a hybrid manufacturing-remanufacturing production model with RFID and product quality

Due to the accelerated expansion of technology and improved living standards, the use of electronic products is increasing exponentially. Unfortunately, the improper disposal of used electronic products, such as cell phones, has resulted in rapid degradation of the environment and is, therefore, posing a great threat to human health. Meanwhile, proper recycling is also likely to generate high profits; thus, recycling of electronic products is a necessity of the time. However, the profitability of recycling and remanufacturing depends upon the return rate, which is very low in the cell phones industry. In this paper, we first identify the root causes of low return rate and, then, develop a novel Radio Frequency Identification (RFID) based return channel to increase the recycling rate. A dual-recovery-channel hybrid manufacturing-remanufacturing production model is proposed, which procure used products of different quality from both the traditional market-driven recovery channel as well as the new RFID based channel. A mathematical model is developed considering the cost of implementation and the design of the proposed RFID based recovery channel. Recovery-channel selection is studied, and results show that a hybrid collection strategy with 85% share of channel-1 and 15% of channel-2 is the optimal one. Moreover, the collection from the proposed RFID based channel increases as the demand increases. For the proposed RFID based system, reader sensing power is found more significant compared to the cost of readers. A numerical example is given with three different cases and impacts of different input parameters are studied to draw important results. Managerial insights are given to assist the designer of the system in some critical decisions.