IDEAS home Printed from https://ideas.repec.org/a/spr/opmare/v13y2020i3d10.1007_s12063-020-00158-9.html
   My bibliography  Save this article

A methodology for determining the optimal reverse flow capacities and the breakeven period for a multi products-component remanufacturing problem of an OEM

Author

Listed:
  • S. Malolan

    (National Institute of Technology Tiruchirappalli)

  • M. Mathirajan

    (Indian Institute of Science)

  • M. K. Tiwari

    (Indian Institute of Technology Kharagpur)

Abstract

Original Equipment Manufacturers (OEM) that assemble multiple durable products are actively engaged in adopting remanufacturing practices. This study addresses the introduction of a new business proposal, which is carrying out remanufacturing of components from acquired returns by an OEM through the set-up of required Reverse Flow Capacities (RFC), which are capacities for dismantling the returns and capacities for remanufacturing various components. Hence, by incorporating the activity on remanufacturing of components, an OEM creates a new cheaper source for obtaining components, in addition to the conventional sources of manufacturing and/or purchasing. The components obtained from any of these three sources can be used to assemble the multiple durable products for satisfying demands. The study refers to this problem as “Multi Products–Component Remanufacturing (MP-CR) problem”. Furthermore, it is identified that the incorporation of MP-CR problem has tremendous potential in the Indian automobile sector. With these, this study address two strategic issues and an operation issue for the incorporation of new MP-CR problem to an OEM. The first strategic issue is the determination of RFC that must be set-up. This strategic issue is addressed in synchronize with the operational issue of determining the optimal Inventory & Production Plans (I&PP) for assembling multiple products for a given planning horizon. In addition, once the optimal RFC is determined, the second strategic issue is the determination of optimal period (called as Breakeven Period (BEP)), after which the OEM would reclaim the capital investment for setting-up the optimal RFC. In order to address these three interrelated decisions, a systematic methodology is proposed. In the proposed methodology, first an Integer Linear Programming Model is developed for the existing system of the OEM to determine the optimal I&PP. Next, this model is extended to determine the optimal RFC and corresponding optimal I&PP. The solution from both proposed models are used for obtaining the Breakeven Period (BEP), which indicates when the capital investments breakeven. Finally, the proposed methodology is demonstrated by developing suitable data observed from an Indian Automobile OEM.

Suggested Citation

  • S. Malolan & M. Mathirajan & M. K. Tiwari, 2020. "A methodology for determining the optimal reverse flow capacities and the breakeven period for a multi products-component remanufacturing problem of an OEM," Operations Management Research, Springer, vol. 13(3), pages 233-248, December.
  • Handle: RePEc:spr:opmare:v:13:y:2020:i:3:d:10.1007_s12063-020-00158-9
    DOI: 10.1007/s12063-020-00158-9
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1007/s12063-020-00158-9
    File Function: Abstract
    Download Restriction: Access to the full text of the articles in this series is restricted.

    File URL: https://libkey.io/10.1007/s12063-020-00158-9?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Teunter, Ruud & Kaparis, Konstantinos & Tang, Ou, 2008. "Multi-product economic lot scheduling problem with separate production lines for manufacturing and remanufacturing," European Journal of Operational Research, Elsevier, vol. 191(3), pages 1241-1253, December.
    2. Teunter, Ruud & Tang, Ou & Kaparis, Konstantinos, 2009. "Heuristics for the economic lot scheduling problem with returns," International Journal of Production Economics, Elsevier, vol. 118(1), pages 323-330, March.
    3. David A. Schrady, 1967. "A deterministic inventory model for reparable items," Naval Research Logistics Quarterly, John Wiley & Sons, vol. 14(3), pages 391-398.
    4. Mabini, Marilyn C. & Pintelon, Liliane M. & Gelders, Ludo F., 1992. "EOQ type formulations for controlling repairable inventories," International Journal of Production Economics, Elsevier, vol. 28(1), pages 21-33, November.
    5. Roland Geyer & Luk N. Wassenhove, 2005. "The Impact of Constraints in Closed-loop Supply Chains: The Case of Reusing Components in Product Manufacturing," Lecture Notes in Economics and Mathematical Systems, in: Bernhard Fleischmann & Andreas Klose (ed.), Distribution Logistics, pages 203-219, Springer.
    6. Kleber, Rainer & Minner, Stefan & Kiesmuller, Gudrun, 2002. "A continuous time inventory model for a product recovery system with multiple options," International Journal of Production Economics, Elsevier, vol. 79(2), pages 121-141, September.
    7. Jaber, Mohamad Y. & El Saadany, Ahmed M.A., 2011. "An economic production and remanufacturing model with learning effects," International Journal of Production Economics, Elsevier, vol. 131(1), pages 115-127, May.
    8. Govindan, Kannan & Soleimani, Hamed & Kannan, Devika, 2015. "Reverse logistics and closed-loop supply chain: A comprehensive review to explore the future," European Journal of Operational Research, Elsevier, vol. 240(3), pages 603-626.
    9. Syed Ali, Sharifah Aishah & Doostmohammadi, Mahdi & Akartunalı, Kerem & van der Meer, Robert, 2018. "A theoretical and computational analysis of lot-sizing in remanufacturing with separate setups," International Journal of Production Economics, Elsevier, vol. 203(C), pages 276-285.
    10. Jeihoonian, Mohammad & Kazemi Zanjani, Masoumeh & Gendreau, Michel, 2017. "Closed-loop supply chain network design under uncertain quality status: Case of durable products," International Journal of Production Economics, Elsevier, vol. 183(PB), pages 470-486.
    11. Dobos, Imre & Richter, Knut, 2004. "An extended production/recycling model with stationary demand and return rates," International Journal of Production Economics, Elsevier, vol. 90(3), pages 311-323, August.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Debabrata Das & Sameer Kumar & Nirmal Baran Hui & Vipul Jain & Charu Chandra, 2023. "Pricing and revenue-based outsourcing strategies in a multi-echelon lot-sizing model under insufficient production capacity," Journal of Revenue and Pricing Management, Palgrave Macmillan, vol. 22(6), pages 514-530, December.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Hsieh, Chung-Chi & Lathifah, Artya, 2022. "Ordering and waste reuse decisions in a make-to-order system under demand uncertainty," European Journal of Operational Research, Elsevier, vol. 303(3), pages 1290-1303.
    2. Felix T.S. Chan & Nan Li & S.H. Chung & Mozafar Saadat, 2017. "Management of sustainable manufacturing systems-a review on mathematical problems," International Journal of Production Research, Taylor & Francis Journals, vol. 55(4), pages 1210-1225, February.
    3. Lucas Dias Condeixa & Pierry Silva & Diego Moah & Brenda Farias & Adriana Leiras, 2022. "Evaluating cost impacts on reverse logistics using an Economic Order Quantity (EOQ) model with environmental and social considerations," Central European Journal of Operations Research, Springer;Slovak Society for Operations Research;Hungarian Operational Research Society;Czech Society for Operations Research;Österr. Gesellschaft für Operations Research (ÖGOR);Slovenian Society Informatika - Section for Operational Research;Croatian Operational Research Society, vol. 30(3), pages 921-940, September.
    4. Bimal Kumar Mawandiya & J. K. Jha & Jitesh J. Thakkar, 2020. "Optimal production-inventory policy for closed-loop supply chain with remanufacturing under random demand and return," Operational Research, Springer, vol. 20(3), pages 1623-1664, September.
    5. Sumit Maheshwari & Amrina Kausar & Ahmad Hasan & Chandra K. Jaggi, 2023. "Sustainable inventory model for a three-layer supply chain using optimal waste management," International Journal of System Assurance Engineering and Management, Springer;The Society for Reliability, Engineering Quality and Operations Management (SREQOM),India, and Division of Operation and Maintenance, Lulea University of Technology, Sweden, vol. 14(1), pages 216-235, March.
    6. Malolan Sundararaman & Mathirajan Muthu, 2020. "Component remanufacturing: a new prospective profitable business approach for the Indian automobile sector," OPSEARCH, Springer;Operational Research Society of India, vol. 57(4), pages 1244-1280, December.
    7. B. C. Giri & M. Masanta, 2022. "A closed-loop supply chain model with uncertain return and learning-forgetting effect in production under consignment stock policy," Operational Research, Springer, vol. 22(2), pages 947-975, April.
    8. M. Masanta & B. C. Giri, 2022. "A closed-loop supply chain model with learning effect, random return and imperfect inspection under price- and quality-dependent demand," OPSEARCH, Springer;Operational Research Society of India, vol. 59(3), pages 1094-1115, September.
    9. Omar, Mohd & Yeo, Ivan, 2014. "A production–repair inventory model with time-varying demand and multiple setups," International Journal of Production Economics, Elsevier, vol. 155(C), pages 398-405.
    10. Taleizadeh, Ata Allah & Moshtagh, Mohammad Sadegh, 2019. "A consignment stock scheme for closed loop supply chain with imperfect manufacturing processes, lost sales, and quality dependent return: Multi Levels Structure," International Journal of Production Economics, Elsevier, vol. 217(C), pages 298-316.
    11. Hallak, Bassam K. & Nasr, Walid W. & Jaber, Mohamad Y., 2021. "Re-ordering policies for inventory systems with recyclable items and stochastic demand – Outsourcing vs. in-house recycling," Omega, Elsevier, vol. 105(C).
    12. El Saadany, Ahmed M.A. & Jaber, Mohamad Y. & Bonney, Maurice, 2013. "How many times to remanufacture?," International Journal of Production Economics, Elsevier, vol. 143(2), pages 598-604.
    13. Tsiliyannis, Christos Aristeides, 2018. "Markov chain modeling and forecasting of product returns in remanufacturing based on stock mean-age," European Journal of Operational Research, Elsevier, vol. 271(2), pages 474-489.
    14. Adel A. Alamri, 2023. "A Sustainable Closed-Loop Supply Chains Inventory Model Considering Optimal Number of Remanufacturing Times," Sustainability, MDPI, vol. 15(12), pages 1-23, June.
    15. 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.
    16. 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.
    17. Van Engeland, Jens & Beliën, Jeroen & De Boeck, Liesje & De Jaeger, Simon, 2020. "Literature review: Strategic network optimization models in waste reverse supply chains," Omega, Elsevier, vol. 91(C).
    18. 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).
    19. Choi, Dae-Won & Hwang, Hark & Koh, Shie-Gheun, 2007. "A generalized ordering and recovery policy for reusable items," European Journal of Operational Research, Elsevier, vol. 182(2), pages 764-774, October.
    20. Diabat, Ali & Jebali, Aida, 2021. "Multi-product and multi-period closed loop supply chain network design under take-back legislation," International Journal of Production Economics, Elsevier, vol. 231(C).

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:spr:opmare:v:13:y:2020:i:3:d:10.1007_s12063-020-00158-9. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.