Planning of capacity,production and inventory decisions in a generic reverse supply chain under uncertain demand and returns

There is a growing interest for the design and operation of reverse supply chain systems due to the cost and the legislation issues. In this paper, we address the disassembly, refurbishing and production operations in a reverse supply chain setting for modular products such as computers and mobile phones considering the uncertainties in this system, which are the return amounts of the used products and demand for final products. We develop a large-scale mixed integer programming model in order to capture all characteristics of this system, and use two-stage stochastic optimisation and robust optimisation approaches to analyse the system behaviour. In the first stage, we focus on the strategic decisions about the capacities at disassembly and refurbishing sites considering different scenarios regarding the uncertainties in the system. In the second stage, we analyse the operational decisions such as production, inventory and disposal rates. We observe through our extensive numerical analysis that the randomness of demand and return values effect the performance of the system substantially and the uncertainty of the return amounts of used products is much more important than the uncertainty of demand in this system.     

Cost and Waste Comparison of Reusable and Disposable Shipping Containers for Cut Flowers

Logistics is a fundamental component of the post‐harvest processes, especially in the floricultural sector where the products have to be marketed in short times after the cutting because of their fragility. In the previous years, new approaches to efficiently manage the logistical function and to reduce costs and environmental impacts have been consolidated. In this paper, the investments for two different containers for flower transportation, one disposable and one reusable, are compared, considering a specific supply chain located in central Italy. All data were provided by stakeholders. These were divided into four groups: purchasing, administration, logistical and disposal costs. For the reusable containers, a reverse logistical system, to collect the return components, was hypothesised by using the network analysis tool of the geographic information system (GIS). Results show that the use of a reusable system, which assures a production with less waste and less environmental pressures, is also economically advantageous. Reusable containers involve an initial investment but became cheaper from the second year of the investment and also remained convenient, considering all the costs related to the return collection of the items. Reusable system permits a financial advantage of approximately 140 k€ in total and 21 k€ for each year, considering all the nine years of analysis. Logistics is responsible of the great contribution of total cost in both the reusable and the disposable container (88% and 76%), probably because of the high fragmentation in the delivery service to sale points. Reverse logistics represents the 17% of the reusable container total costs. Copyright © 2011 John Wiley & Sons, Ltd.     

Coordination of pricing,inventory, and production reliability decisions in deteriorating product supply chains

In this article, we study a two-level supply chain model for deteriorating items, in which the supplier’s production system is unreliable and the retailer’s demand is price-sensitive. The supplier’s production line may randomly shift from the in-control state to the out-of-control state. When the production line is in the out-of-control state, a proportion of the produced products will have bad quality. To mitigate the out-of-control risks, the supplier can improve the production line reliability by investing in high-quality machines, highly skilled workers, or advanced maintenance technologies. We start with the study of pricing and inventory problems concerning endogenous reliability in the integrated and decentralised scenario. To better illustrate the proposed models, two applicable algorithms are designed to determine the optimal production reliability, ordering quantity, and prices. Then, a cooperative reliability investment and revenue-sharing contract is proposed to coordinate the supply chain. Numerical examples and sensitivity analysis of the equilibrium strategies and coordinating results on key system parameters (e.g. deterioration rate, production rate, etc.) are given to verify the effectiveness of the contract, and meanwhile get some managerial insights.     

Pricing and ordering decisions in a supply chain with imperfect quality items and inspection under buyback of defective items

In this article, the economic production and inventory model in a three-layer supply chain including one distributor, one manufacturer and one retailer for a single-product and general demand functions under three scenarios is developed. We assume that during the production process, both healthy and defective items are generated. As the first scenario, we develop the first model, in which the defective items are not reworked and all considered as scrape, while in the second model, we assume that the defective items are reworked and are sold as perfect item. In the second scenario, we assume that defective item can be sold with lower price than the selling price. Moreover, raw materials with imperfect quality are sent back from a distributor to outside supplier under a lower price. Determining the order quantity of the distributor and the selling prices of the distributor and the manufacturer as well as the retailer was the goal of this article such that the total profit of each member is maximised. In order to solve the models, the Stackelberg approach is employed between the members, and the concavity of the profit functions is proved using several theorems. Then, closed form solutions are derived for the decision variables and a solution algorithm is proposed to determine the optimal solutions. Finally, a numerical example is presented to illustrate the applicability of the model.