Lot sizing for optimal collection and use of remanufacturable returns over a finite life-cyle
Author: Atasu, Atalay ; Cetinkaya, SilaINSEAD Area: Technology and Operations ManagementIn: Production and Operations Management, vol. 15, no. 4, winter 2006 Language: EnglishDescription: p. 473-487.Type of document: INSEAD ArticleNote: Please ask us for this itemAbstract: In order to recover the highest value from remanufactured products, collection rates, return timings, and reusability rates of used product returns should be matched with the market demand and available supply. With these motivations, we develop analytical models for the efficient use of returns in making production, inventory, and remanufacturing decisions under finite life cycles. We consider a stylistic setting where a collector collects used product returns and ships them to the manufacturer who, in turn, recovers value by remanufacturing and supplies products within the finite life cycle. Naturally, the manufacturer's production, inventory and remanufacturing decisions and costs are influenced by the timing and quantity of the collector's shipments of used product returns. Hence, we investigate the impact of return flows on the profitability of the manufacturer-collector pair by developing system-wide cost optimization models. Analyzing the properties of the optimal shipment frequency, we observe that the fastest reverse supply chain may not always be the most efficient one.| Item type | Current location | Call number | Status | Date due | Barcode | Item holds |
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In order to recover the highest value from remanufactured products, collection rates, return timings, and reusability rates of used product returns should be matched with the market demand and available supply. With these motivations, we develop analytical models for the efficient use of returns in making production, inventory, and remanufacturing decisions under finite life cycles. We consider a stylistic setting where a collector collects used product returns and ships them to the manufacturer who, in turn, recovers value by remanufacturing and supplies products within the finite life cycle. Naturally, the manufacturer's production, inventory and remanufacturing decisions and costs are influenced by the timing and quantity of the collector's shipments of used product returns. Hence, we investigate the impact of return flows on the profitability of the manufacturer-collector pair by developing system-wide cost optimization models. Analyzing the properties of the optimal shipment frequency, we observe that the fastest reverse supply chain may not always be the most efficient one.
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