Determining end-of-life policy for recoverable products

We address a problem that arises for an original equipment manufacturer (OEM) who produces a product both in new and remanufactured forms. A remanufactured product is produced using the parts harvested from recovered products (cores) upon their disassembly, and it may contain some new parts while the excess good parts from cores are salvaged for profit. Other options are available to the OEM for handling cores that do not require disassembly. It follows that the per-unit remanufacturing cost is not constant and it may change depending on the number of recovered cores, good-part reclamation yields, and sales of remanufactured products. We present analytical results for determining an optimal solution with regard to: (i) quantity of cores to collect, (ii) end-of-life (EOL) options for the cores and (iii) product pricing of new and remanufactured products. Our analysis reveals existence of a ‘limiting part’ that dictates the number of cores to collect and a ‘key part’ that determines the number of remanufactured products to make as well as the fact that the availability of cores does not impact the EOL policy type for a product. Our analysis also enables mapping of product characteristics onto corresponding EOL policy types.     

A robust optimisation model for hybrid remanufacturing and manufacturing systems under uncertain return quality and market demand

In remanufacturing research, most researchers predominantly emphasised on the recovery of whole product (core) rather than at the component level due to its complexity. In contrast, this paper addresses the challenges to focus on remanufacturing through component recovery, so as to solve production planning problems of hybrid remanufacturing and manufacturing systems. To deal with the uncertainties of quality and quantity of product returns, the processing time of remanufacturing, remanufacturing costs, as well as market demands, a robust optimisation model was developed in this research and a case study was used to evaluate its effectiveness and efficiency. To strengthen this research, a sensitivity analysis of the uncertain parameters and the original equipment manufacturer’s (OEM’s) pricing strategy was also conducted. The research finding shows that the market demand volatility leads to a significant increase in the under fulfilment and a reduction in OEM’s profit. On the other hand, recovery cost reduction, as endogenous cost saving, encourages the OEM to produce more remanufactured products with the increase in market demand. Furthermore, the OEM may risk profit loss if they raise the price of new products, and inversely, they could gain more if the price of remanufactured products is raised.     

新产品质量对闭环供应链再制造模式选择的影响

研究了新产品质量对闭环供应链回收再制造模式选择的影响。借助博弈论,建立了原制造商外包再制造和授权再制造的Stackelberg博弈模型,利用逆向归纳法解得两个模型的均衡解和供应链利润,并对均衡结果进行了比较分析。研究发现：外包再制造模式的供应链利润、消费者剩余、社会福利均优于授权再制造模式。原制造商选择外包再制造模式的利润要高于授权再制造模式,而第三方制造商最优策略受再制品价值折扣与新产品质量的影响。当再制品价值折扣系数与回收规模满足一定条件,而且新产品质量较高时,原制造商采取外包模式对环境更加友好。     

Optimal policies in hybrid manufacturing/remanufacturing systems with random price-sensitive product returns

We study a production planning problem in which a manufacturer aims to meet a random market demand by manufacturing new product and remanufacturing returned product. The product returns are random and price-sensitive. To maximise his profit, the manufacturer needs to optimally decide on the acquisition price for the returned product as well as the quantities of the new product to be manufactured and the returned product to be remanufactured. We investigate two cases based on the relative lengths of the manufacturing and remanufacturing lead times. (1) In the case with a shorter manufacturing lead time, the manufacturer first decides his acquisition price for the returned product before the production starts, and then decides the quantities of manufacturing/remanufacturing after the product returns are realised. (2) In the case with a shorter remanufacturing lead time, the manufacturer first decides the manufacturing quantity and the acquisition price simultaneously, and then the remanufacturing quantity based on the quantity of manufactured and returned products. Each case is formulated as a two-stage stochastic optimisation problem, and the corresponding optimal polices of both are characterised and derived.     

Two-stage make-to-order remanufacturing with service-level constraints

We consider a firm that meets demand for an order with remanufactured products, new products or a mix of both. There are constraints on the service level. We use a stylized two-stage GI/G/ 1 queuing network model to study the problem. The first stage is unique to each product, whereas remanufactured and new products share the second stage. The objective was to find the optimal, long run production mix that maximizes profit subject to a service-level constraint that restricts the average order lead-time. There is yield in the remanufacturing process, where yield is the per cent of returned used products that result in a good part after remanufacturing. In the analytic model, we make the simplifying assumption that the producer always gets enough return of used products to meet its remanufacturing needs in the production mix. However, we relax this assumption in a simulation. We find that the optimal solution is generally non-trivial, i.e. the firm generally uses a mix of remanufactured and new products to meet demand. When the new product is less profitable than the remanufactured product, then it is optimal to remanufacture 100%, provided that there is enough supply of used products. When the new product is more profitable, however, the proportion of remanufacturing increases as service level increases. We use simulation to test the robustness of the analytic model by including complexities such as stochastic product returns and stochastic production yield.     

再制造过程中再制造品的质量选择及其影响

在废旧品回收充足的静态环境下,假设可再制造部分的质量水平在再制造的过程中发生衰减,研究了制造商如何选择再制造品的质量以及如何有效地规划新产品和再制造品的价格。不同的不可再制造部分的质量水平会影响新产品和再制造品的市场需求量,研究表明,随着再制造品质量的不断提高,新产品需求不断降低,再制造品需求不断增加,再制造品对新产品的市场挤兑效应越来越明显,直至将新产品完全挤出市场,形成完全再制造品市场。在此过程中,制造商利润呈现出先凸后凹的增长趋势,其利润在完全再制造品市场时达到最大。     

考虑渠道权力结构和产品双重差异的再制造闭环供应链最优定价决策

针对具有不同渠道权力结构和回收拆解产品质量差异、新产品与再制造产品价格差异的再制造闭环供应链,主要研究其成员企业最优定价决策问题。构建了包含制造/再制造商、零售商、消费者和回收拆解商的三级再制造闭环供应链决策模型;采用Stackelberg主从博弈确定不同渠道权力结构下各成员企业的最优定价策略及其利润,并重点探讨废旧产品回收率τ、产品替代系数δ两个关键参数对它们的影响;将该决策模型应用到汽车发电机再制造闭环供应链案例。研究结果表明：1） 对于3种渠道权力结构,当制造/再制造商和零售商为主导者时,其自身利润和再制造闭环供应链总利润均最大;而当回收拆解商为主导者时,其自身利润和总利润却最小;2） 随着τ和δ的提高,单位新产品与再制造产品的最优批发价、最优零售价均增加,单位废旧产品的最优回收价则降低;制造/再制造商和零售商的利润下降,回收拆解商的利润上升,导致再制造闭环供应链的总利润呈U形。研究能够为各成员企业的最优定价决策提供有效支持与参考。     

基于消费者异质性需求的闭环供应链再制造授权模式研究

在消费者异质性需求的市场中,为了探讨最佳的再制造授权模式,基于原始设备制造商(original equipment manufacturer, OEM)与第三方再制造商((third party remanufacturer, TPR)同时进行再制造的闭环供应链(closed loop supply chain, CLSC),采用博弈论分别讨论TPR独立再制造和OEM专利授权再制造(包括单位费用授权和固定费用授权)的CLSC决策模型,对比3种模型的均衡解及最优利润,并分析TPR再制品市场接受度、再制造成本节约对均衡解及企业利润的影响。研究表明,授权增加了OEM利润,故OEM更倾向于对TPR进行授权,并根据固定授权费的大小来决定授权模式;CLSC总利润在固定费用授权模式下最大,且该模式下消费者的购买成本最低;TPR再制品市场接受度及再制造成本节约的增加可提高TPR利润,但会加大对OEM再制品的挤兑程度,最终导致OEM提高授权费来弥补利润损失。     

碳交易政策下考虑渠道拓展的制造/再制造企业生产决策研究

分析碳交易政策下企业考虑进行渠道拓展时制造/再制造生产的决策问题。分别建立了传统渠道模型及2种不同的渠道拓展模型,分析消费者偏好及碳政策对企业再制造生产决策的影响及不同渠道拓展策略下的最优生产决策。研究发现,只有适当的碳价格才能促进再制造的生产;在消费者线上购买偏好较高时,线上销售再制造产品线下销售新产品可以同时达到企业利润及环境成本最优,实现企业与环境的双赢。     

Optimal pricing and core acquisition strategy for a hybrid manufacturing/remanufacturing system

Remanufacturing is one of the product recovery options where the quality of used products (cores) is upgraded to ‘as-good-as-new’ conditions. In this article, we consider a monopolist firm selling new and remanufactured products to quality-conscious primary customers and price-sensitive secondary customers, respectively, with one-way substitution, i.e. some primary customers may substitute new products by remanufactured products while secondary customers can never afford to buy new products. We develop economic models under two scenarios – when the supply of cores is unconstrained and when manufacturers have to procure cores at an acquisition price. The major observations of the article are as follows. A firm is better off when there is no constraint on the supply of cores. Even when cores have to be acquired at an acquisition price, the profitability is higher than that when the firm does not engage in remanufacturing activities. When a larger number of primary customers replace new products with remanufactured products, there is partial cannibalization of new product sales; however, the combined market share and profitability of the firm increase. When core supply is constrained and customers are less sensitive to core prices, the limited supply of cores may render remanufacturing an infeasible option for the firm. Therefore, firms should not only generate awareness among primary customers to buy remanufactured products, but also step up efforts to ensure a steady supply of cores. We conclude the article with managerial implications and directions for future research.     

Cost information sharing under competition in remanufacturing

Third-party remanufacturers (TPRs) enter the market and compete with original equipment manufacturers (OEMs). Because of multiple uncertainty of the remanufacturing process, the variable remanufacturing cost is random and its true value cannot be observed by OEMs. In this paper, we consider the competition between one TPR and one OEM, and then investigate incentives of cost information sharing. The remanufactured product quantity is constrained by the new product quantity. If the new production cost is low enough such that the optimal remanufactured product quantity is less than the optimal new product quantity, the TPR should always share cost information with the OEM so that their quantity decisions in equilibrium are more responsive to market conditions to avoid overproduction or underproduction. However, if the quantity constraint is binding, the TPR should not always share cost information; in this case, cost information sharing can allow the OEM to adjust the new product quantity to limit remanufacturing and hence be detrimental to the TPR. When the TPR does not voluntarily share cost information, we further examine the impacts of private information on the society and the environment, and then suggest the government to promote information sharing and subsidise the TPR under certain conditions.     

Pricing and production decisions in a closed-loop supply chain considering strategic consumers and technology licensing

This paper considers a closed-loop supply chain consisting of a manufacturer and a third party in which the manufacturer licenses the third party to undertake remanufacturing activities in the presence of strategic consumers. We analyse the impacts of strategic consumer behaviour and the third-party remanufacturing cost on three kinds of remanufacturing scenarios, namely no-remanufacturing, partial-remanufacturing and full-remanufacturing. We adopt a Stackelberg game to obtain the equilibrium strategies of each remanufacturing model and show that the demand of new products decreases and the demand of remanufactured products increases as consumers become more strategic. Considering the manufacturer’s profit decrease due to strategic consumer behaviour, the manufacturer suffers a smaller profit loss when he licenses the third party to remanufacture because he can charge a higher licensing fee from the third party to share remanufacturing revenues. Moreover, the manufacturer prefers the third-party remanufacturing mode rather than the manufacturer–remanufacturing mode if the third-party remanufacturing cost is relatively low and remanufacturing can always bring a profit increase to both the manufacturer and the third party.     

专利保护下闭环供应链差别定价及协调

研究了专利保护下制造商授权经销商再制造的特殊闭环供应链。在新产品和再制造品存在差异的情况下,建立了分散决策与联合决策情形下的闭环供应链博弈模型,得出了制造商的最优批发价格和专利许可费、经销商对新产品和再制造产品的差异定价以及双方的最优利润, 并分析了不同参数变化对价格、回收率和利润的影响。最后,采用收益分享合同实现了许可经销商再制造的闭环供应链协调。     

碳抵消机制下的制造/再制造生产决策优化研究

为研究碳排放权抵消机制对制造/再制造生产决策的影响,分别构建基于配额和基于排放量两种抵消机制的生产决策优化模型。分析抵消上限、再制造品接受度对产量、企业利润、消费者剩余和社会总福利的影响。结果表明,抵消机制会提高新品产量并降低再制造品产量,增加企业利润、消费者剩余和社会总福利,以上变化幅度随抵消上限的提高先增大后减小。再制造品接受度较高时,最优解对抵消上限变化更敏感。政府应将抵消上限设定在低水平且谨慎调整,可通过适度牺牲企业利润提高社会福利。拥有高配额的企业在配额机制下运作更具效益,反之在排放量机制下更优。     

Optimal policy in a hybrid manufacturing/remanufacturing system with financial hedging

This paper proposes a hybrid manufacturing/remanufacturing model with the financial hedging in the case where the randomness in demand is correlated with the financial markets. The provided models are mainly for those risk-averse remanufacturers who faced with random demand and yield. The aim of this paper is to maximise remanufacturer utility by purchasing financial instruments and producing new and remanufactured products. A hybrid manufacturing/remanufacturing system production planning model is first built under mean-variance framework, and then the financial hedging is integrated into the hybrid production system. There are three main findings. First, the variance of profit with financial hedging is always less than the variance of the model without financial hedging. Second, the remanufacturer with high (low) risk aversion is more likely to produce new (remanufactured) products. Third, the model without (with) financial hedging tends to produce new (remanufactured) products unless remanufacturing cost is low (high) enough. All those findings proved that financial hedging can reduce the operational uncertainty effectively and increase the proportion of remanufacturing, which will make remanufacturing firms more economical and environmentally friendly. Therefore, remanufacturing firms can consider using financial hedging to reduce operational uncertainty.     

Dynamic product acquisition in closed loop supply chains

We consider a closed-loop supply chain where demand can either be satisfied by manufacturing new products or by buying back used products from customers and upgrading their functionality by remanufacturing. A joint buy-back pricing and manufacturing–remanufacturing decision model at the operations–marketing interface is presented that allows for dynamic parameters, e.g. product life cycles and seasonal aspects. The model allows the identification of beneficial opportunities for buying back and storing used products for immediate and future recovery. We present a new deterministic, dynamic, continuous-time optimisation model, derive necessary and sufficient optimality conditions, and develop a solution algorithm to find the cost-minimising manufacturing and remanufacturing policies as well as buy-back strategies for used products based on Pontryagin's Maximum Principle. It is shown that, in general, an optimal policy will include time intervals where returns are acquired so as to synchronise demand and remanufacturing, where returns are acquired and stored for future remanufacturing, and intervals where demand is satisfied by a mix of manufactured and remanufactured products. Furthermore, we discuss several reactive and proactive acquisition and remanufacturing heuristics and show under which conditions they are optimal. The findings are illustrated by numerical examples.     

Design for life-cycle profit with simultaneous consideration of initial manufacturing and end-of-life remanufacturing

Remanufacturing is emerging as a promising solution for achieving green, profitable businesses. This article considers a manufacturer that produces new products and also remanufactured versions of the new products that become available at the end of their life cycle. For such a manufacturer, design decisions at the initial design stage determine both the current profit from manufacturing and future profit from remanufacturing. To maximize the total profit, design decisions must carefully consider both ends of product life cycle, i.e. manufacturing and end-of-life stages. This article proposes a decision-support model for the life-cycle design using mixed-integer nonlinear programming. With an aim to maximize the total life-cycle profit, the proposed model searches for an (at least locally) optimal product design (i.e. design specifications and the selling price) for the new and remanufactured products. It optimizes both the initial design and design upgrades at the end-of-life stage and also provides corresponding production strategies, including production quantities and take-back rate. The model is extended to a multi-objective model that maximizes both economic profit and environmental-impact saving. To illustrate, the developed model is demonstrated with an example of a desktop computer.     

存在绿色消费者的再制造模式选择策略

研究了绿色消费者对制造商（OEM）和再制造商（3PR）再制造模式选择的影响。在无绿色消费者和存在绿色消费者情况下,分别建立了两种斯塔克尔伯格博弈的再制造模型：再制造外包与授权再制造,得到了两种模型的均衡解及OEM和3PR利润。比较分析发现,当绿色消费者比例较高时,OEM和3PR均偏好于再制造外包模式。然而,当绿色消费者比例较低时,虽然OEM依然偏好于再制造外包模式,但是,当消费者对再制造产品估价较低时,3PR偏好于授权再制造模式。此外发现,无论绿色消费者比例高低,在再制造外包模式,消费者剩余与社会福利总是高于授权再制造模式。     

制造与再制造决策的优化

产品回收再利用越来越受到重视，许多原产商都积极地进行回收再制造。再制造与制造过程通常会共用一些相同的生产资源，由此出现的问题就是如何协调这两者的作业，使之达到最优。本文假定制造与再制造产品可以互相替换，着重探讨了当制造提前时间小于或等于再制造提前时间时，制造与再制造的最优策略。     

Pricing and warranty decisions in a two-period closed-loop supply chain

For a two-period closed-loop supply chain (CLSC) consisting of a manufacturer and a retailer, Stackelberg game analyses are conducted to examine pricing and warranty decisions under two warranty models depending on who offers warranty for new and remanufactured products and the corresponding benchmark models with a warranty for new products only. Next, we identify the conditions under which warranty for remanufactured products is offered and investigate how this warranty affects the CLSC operations. Subsequently, comparative studies are carried out to examine equilibrium decisions, profitability and consumer surplus of the CLSC between the two warranty models. Analytical results show that offering warranty for remanufactured products does not affect new product pricing in period 2, but influences the pricing of new products in period 1 and remanufactured products in period 2, thereby enhancing remanufacturing, individual and channel profitability, and consumer surplus. Compared to the retailer warranty for remanufactured products, the manufacturer warranty can attain a more equitable profit distribution. If the warranty cost advantage of the manufacturer (retailer) is significant relative to that of the retailer (the manufacturer), the manufacturer (retailer) arises as a natural choice to offer warranty for remanufactured products as this decision enhances both profitability and consumer surplus.