Production and distribution policies for recoverable products

Abstract

The purpose of this thesis is to develop the optimal operating policies for recoverable products in closed-loop supply chain. A procurement policy for reusable items with the deterministic demand rate as well as the conflict between OEM and remanufacturer in the distribution channel are investigated. First, we deals with a joint EOQ and EPQ model in which a stationary demand is satisfied by recovered products as well as newly purchased products. It is assumed that a fixed proportion of the used products are collected from customers and later recovered for reuse. We generalizes the (P, R) policy in the literature by treating the sequence of orders for newly purchasing products and setups for recovery process within a cycle as a decision variable. Through example problems we illustrate the validity of the model and solution procedure developed. Secondly, we focus on the relation between the amount of a return incentive and the return rate. Many manufacturers are encouraged to collect used products from end-users for remanufacturing or proper disposal. This collection system can be classified into the waste-stream system and the market driven system according to the willingness of manufacturers to obtain used products. A market-driven system motivates end-users to return end-of-life products by financial incentives, such as deposit systems, credit toward a new unit, or cash paid for a specified level of quality. We focus on the profitability of manufacture when the return rate of used products can be controlled by the return incentives given to the end-users. The proportion of the used products from end-users is assumed to be controllable by means of return incentives. Policies that manufacturer gives end-users rewards for returning the used products can change sales price. This leads to the assumption that the demand is price dependent with a constant price elasticity. We develop a joint EOQ and EPQ model with the objective of maximizing the manufacturer’s pro...