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Case Article—ReCellular Inc: Managing Demand Uncertainty in Closed-Loop Remanufacturing

Author

Listed:
  • Akshay Mutha

    (Grossman School of Business, The University of Vermont, Burlington, Vermont 05405)

  • Saurabh Bansal

    (Department of Supply Chain & Information Systems, Smeal College of Business, Pennsylvania State University, University Park, Pennsylvania 16802)

  • V. Daniel R. Guide

    (Department of Supply Chain & Information Systems, Smeal College of Business, Pennsylvania State University, University Park, Pennsylvania 16802)

Abstract

The modeling-based case study is useful for two purposes: introduce closed-loop supply chains and highlight and model some of its unique aspects that the traditional newsvendor formulation does not capture. The case focuses on a third-party remanufacturer (3PR) who buys used cellphones in different quality grades in anticipation of demand. Phones in high grade have been used gently—they have a high acquisition cost but low remanufacturing cost. Low-grade phones have been used extensively—they are cheaper to acquire but have a higher remanufacturing cost. Medium-grade phones have intermediate acquisition and remanufacturing costs. The 3PR needs to trade off these two costs and determine which grade(s) of used phones to buy. The 3PR restores all phones to the same like-new standard during remanufacturing. Extensive use of the case in supply chain management courses shows that in the absence of a mathematical model, students systematically deviate from the optimal decisions because of contextual features. Overall, students believed the case was challenging and that it provides a valuable learning experience, both as an exposure to the closed-loop supply chain domain as well as developing models with industry-specific factors.

Suggested Citation

  • Akshay Mutha & Saurabh Bansal & V. Daniel R. Guide, 2023. "Case Article—ReCellular Inc: Managing Demand Uncertainty in Closed-Loop Remanufacturing," INFORMS Transactions on Education, INFORMS, vol. 24(1), pages 8-12, September.
  • Handle: RePEc:inm:orited:v:24:y:2023:i:1:p:8-12
    DOI: 10.1287/ited.2021.0254ca
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    References listed on IDEAS

    as
    1. Akshay Mutha & Saurabh Bansal & V. Daniel R. Guide, 2016. "Managing Demand Uncertainty through Core Acquisition in Remanufacturing," Production and Operations Management, Production and Operations Management Society, vol. 25(8), pages 1449-1464, August.
    2. Matthew J. Drake & David W. Pentico & Robert P. Sroufe, 2012. "The Remanufacturing Newsvendor Problem," International Series in Operations Research & Management Science, in: Tsan-Ming Choi (ed.), Handbook of Newsvendor Problems, edition 127, chapter 0, pages 249-262, Springer.
    3. Akshay Mutha & Saurabh Bansal & V. Daniel R. Guide, 2019. "Selling Assortments of Used Products to Third‐Party Remanufacturers," Production and Operations Management, Production and Operations Management Society, vol. 28(7), pages 1792-1817, July.
    4. V. Daniel R. Guide, Jr. & Ruud H. Teunter & Luk N. Van Wassenhove, 2003. "Matching Demand and Supply to Maximize Profits from Remanufacturing," Manufacturing & Service Operations Management, INFORMS, vol. 5(4), pages 303-316, October.
    Full references (including those not matched with items on IDEAS)

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