Effects of random yield in remanufacturing with price-sensitive supply and demand

Date

2006-09-01

Author

Bakal, İsmail Serdar
Akcali, Elif

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In this study, we investigate the effects of recovery yield rate on pricing decisions in reverse supply chains. Motivated by the automotive parts remanufacturing industry, we consider an end-of-life product from which a particular part can be recovered and remanufactured for reuse, and the remainder of the product can be recycled for material recovery. Both the supply of end-of-life products and demand for remanufactured parts are price-sensitive. Yield of the recovery process is random and depends on the acquisition price offered for the end-of-life products. In this setting, we develop models to determine the optimal acquisition price for the end-of-life products and the selling price for remanufactured parts. We also analyze the effects of yield variation to the profitability of remanufacturing, benefits of delaying pricing decisions until after yield realization, and value of perfect yield rate information.

Subject Keywords

remanufacturing, pricing, random yield, value of information, REVERSE-LOGISTICS, PRODUCT RECOVERY, INFORMATION, MANAGEMENT, SYSTEMS

URI

https://hdl.handle.net/11511/102403

Journal

PRODUCTION AND OPERATIONS MANAGEMENT

DOI

https://doi.org/10.1111/j.1937-5956.2006.tb00254.x

Collections

Department of Industrial Engineering, Article

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Citation Formats

İ. S. Bakal and E. Akcali, “Effects of random yield in remanufacturing with price-sensitive supply and demand,” PRODUCTION AND OPERATIONS MANAGEMENT, vol. 15, no. 3, pp. 407–420, 2006, Accessed: 00, 2023. [Online]. Available: https://hdl.handle.net/11511/102403.