Optimal pricing and production decisions in utilizing reusable containers

Date

2013-06-01

Author

Atamer, Busra
Bakal, İsmail Serdar
Bayındır, Zeynep Pelin

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This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.

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In this study, we focus on pricing and production decisions in utilizing reusable containers with stochastic customer demand. We consider a manufacturer that sells a single product to the customers in reusable containers with two supply options: (i) brand-new containers and (ii) returned containers from customers. The return quantity depends on both customer demand and the acquisition fee determined by the manufacturer. The unit cost of production using brand-new containers is different than the unit cost of reusing returned containers. The customers are indifferent between brand-new and recovered products. We also consider resource restrictions on the production operations. In this setting, we investigate the optimal pricing and production decisions in order to maximize the manufacturer's profit. We characterize the optimal acquisition fee and the optimal order quantity of brand-new containers analytically and investigate the effect of parameters through an extensive computational study.

Subject Keywords

Closed-loop supply chain management, Reverse logistics, Acquisition management, Reusable containers, Deposit-refund systems

URI

https://hdl.handle.net/11511/48760

Journal

INTERNATIONAL JOURNAL OF PRODUCTION ECONOMICS

DOI

https://doi.org/10.1016/j.ijpe.2011.08.007

Collections

Department of Industrial Engineering, Article

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Citation Formats

B. Atamer, İ. S. Bakal, and Z. P. Bayındır, “Optimal pricing and production decisions in utilizing reusable containers,” INTERNATIONAL JOURNAL OF PRODUCTION ECONOMICS, pp. 222–232, 2013, Accessed: 00, 2020. [Online]. Available: https://hdl.handle.net/11511/48760.