Effects of competition on product recovery decisions

Çetin, Can Barış
In this study, we consider a hybrid manufacturing-remanufacturing environment consisting of an Original Equipment Manufacturer (OEM) and Independent Remanufacturer (IR). OEM can produce both new and remanufactured products, whereas IR is only capable of remanufacturing. Market price is deterministic and decreasing linearly with total quantity supplied to the market. Remanufacturing yield increases with remanufacturability investment that has a cost which increases with the level of remanufacturability. Remanufacturing cost for a successfully remanufactured product decreases with increase in remanufacturability. We analyze this system in a twoperiod setting. OEM determines the level of investment in remanufacturability and the quantity of new products in the first period, which determines the quantity of returns in the second period. OEM and IR simultaneously determine their remanufacturing input quantities considering opponent’s action in the second period. Our objective is to investigate the effects of competition, sorting information availability and competition awareness on environmental and economic performances of this system. For this environment, models that differ in competition, sorting information availability and competition awareness are considered. Total system-wide profit and v ratio of remanufacturing output to total returns are used to represent economical and environmental performances, respectively. We explore the effects of various settings via a computational study.


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Citation Formats
C. B. Çetin, “Effects of competition on product recovery decisions,” M.S. - Master of Science, Middle East Technical University, 2018.