Assessing the economic and environmental impact of remanufacturing: a decision support tool for OEM suppliers

The circular economy is often presented as a solution for companies to increase the sustainability of their business. In many situations where suppliers produce subassemblies or modules for OEMs in a B2B context, dependency on their clients limits their options for profitable closed-loop supply chains. In this paper, we develop a simple tool suppliers can use to quickly assess whether remanufacturing is economic and environmentally attractive compared to producing new components. We derive optimal acquisition and reuse quantities that minimise total costs. Based on our analysis with a supplier in the automotive industry, we find that used core prices and remanufacturing yield rates have a large impact while an optimised design for remanufacturing can only marginally improve the situation. The tool is applicable to a wide variety of suppliers and industries that remanufacture their modules or subassemblies, or are exploring the option to engage in remanufacturing operations.     

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。     

Real option approach to evaluate cores for remanufacturing in service markets

Acquisition of cores is important for the success of remanufacturing business, but evaluating the value of cores is difficult due to many uncertain issues in the remanufacturing system. In this paper, we examine the value of cores using the real option valuation (ROV) approach, which well captures the production flexibility and represents different operations options in remanufacturing. First, in a system where the demand of remanufactured products is low, we focus on the uncertainty of price. We compare the cases where disposing cores occurs only at the expiration time and before that. The model also identifies under which circumstances disposing core early brings in more benefit. Furthermore, we study a remanufacturing system where demand and return are both uncertain. In this case, a spread option is used for evaluating the marginal value of obtaining additional cores. This approach also brings the advantage of linking the correlation between demand and return, which in fact is often exhibited in remanufacturing. The numerical experiments indicate that this correlation has an impact on collecting policies. This study illustrates the possibility of using ROV for core pricing modelling, and the study results also provide some managerial insights in managing returned cores.     

Heuristic algorithms for maximising the total profit of end-of-life computer remanufacturing

Recently the optimisation of end-of-life (EOL) computer remanufacturing has been highlighted since a big amount of used computers have been disposed of every year. Each part inspected after disassembling EOL computers can have various EOL options such as reuse, repair, reconditioning and so on. Depending on EOL options, recovered values and costs of parts will be different. Hence, in order to maximise the profit of remanufactured computers, it is important to develop the method as to how to decide the EOL options of computer parts. To this end, this study deals with a decision-making problem to select the best EOL option policy of the computer parts for maximising the total profit of computer remanufacturing considering its incurred costs and demand of remanufactured computers during multiple production periods. In particular, to maximise the total profit, the conditional repair option is newly proposed. To resolve the problem, a genetic search algorithm and an ant colony search algorithm have been developed. Computational experiments have carried out to evaluate the algorithms and the proposed conditional repair option.     

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.     

Dual channel closed-loop supply chain coordination with a reward-driven remanufacturing policy

This paper investigates a reward-driven policy, employed in a closed-loop supply chain (CLSC), for acquiring used products earmarked for remanufacture. Under the examined model, a single manufacturer sells products through a retailer as well as directly to end users in a forward supply chain. In the reverse supply chain, three different modes of collection are employed to capture used products for remanufacture: they are through a third party, directly by the manufacturer and from the retailer. Mathematical models for both non-cooperative and centralised scenarios are developed to characterise the pricing decisions and remanufacturing strategies that indicate individual and overall supply chain performance. Optimality of all the proposed models is examined with theory. To coordinate and achieve a win–win outcome for channel members, we proposed a three-way discount mechanism for the manufacturer. Extended numerical investigation provides insights on ways to manage an efficient reward-driven CLSC in a dual-channel environment.     

Integration of vendor selection into production and remanufacturing planning subject to emission constraints

This paper presents a new model formulation that incorporates vendor selection into production and remanufacturing planning subject to emission constraints. The objective is to determine a feasible production and remanufacturing plan at minimal cost. In each period, the given external demand must be satisfied for both new and remanufactured products. Remanufactured products can be substituted by new products, but not vice versa. When a product is (re)manufactured, the appropriate machine must be set up, which entails set-up costs and/or set-up time. The procurement of raw material that is offered by several vendors at different prices is integrated into this planning problem. To solve this integrated production and remanufacturing planning problem, we apply two solution approaches based on mathematical programming: first, a combination of column generation and a period-oriented fix-and-relax heuristic and second, an adapted fix-and-optimise heuristic. The results of our numerical investigation demonstrate the high solution quality of both solution approaches.     

基于可信性理论的模糊环境下再制造生产计划

针对再制造系统生产计划问题,分析了再制造系统的特点。以一般再制造系统为原型,在可回收产品数量、单位产品拆卸时间、单位零部件再制造加工时间以及客户需求不确定情况下,考虑回收、拆卸、再制造加工、重新装配的能力限制,以总成本最小化为目标,构建了模糊再制造系统混合整数规划模型。利用可信性理论给出了模糊模型的清晰等价形式。最后,通过算例分析了不同置信水平选取对再制造成本的影响,验证了模型对再制造企业生产计划制定的适用性。     

Effects of carbon emission regulations on remanufacturing decisions with limited information of demand distribution

Policy-makers are developing regulation policies to drive down carbon emissions from industries. Independent remanufacturers (IRs), which remanufacture recycled products/components/parts, must manage and evaluate economic costs generated by the production under future carbon emission regulations. We present three optimisation models to determine the remanufacturing quantity that maximises the total profits under three common carbon emission regulation policies: (a) mandatory carbon emissions capacity, (b) carbon tax and (c) cap and trade. These models include sales revenue, remanufacturing cost, disposal cost, inventory holding cost, shortage cost and carbon emission cost. The max–min approach is used to solve the models, which assume limited information on demand distribution. We investigate how the three regulation policies affect remanufacturing decision-making for IRs and we also solve some numerical examples where we vary the magnitudes of incentives, penalties and stringency of constraints to provide implications to policy-makers. The results indicate that remanufacturers should aim to improve yield rate to maximise the profit irrespective of the implemented carbon emissions policy. Policy-makers should prefer the carbon tax policy, if any of the other two policies must be performed, a remanufacturing discount such as a higher carbon emission cap or lower penalty should be implemented to better promote the development of remanufacturers.     

Hybrid manufacturing/remanufacturing lot-sizing and supplier selection with returns,under carbon emission constraint

This paper addresses a lot-sizing problem in manufacturing/remanufacturing systems. The studied system is a single manufacturing line where both regular manufacturing and returns remanufacturing processes are carried out, with different set-up costs for each process. We consider also a returns collection phase from customers/distributors with deterministic returns quantities at each period of the planning horizon. The environmental aspect is assumed in this study by considering a carbon emission constraint for the manufacturing, remanufacturing and transportation activities. A mixed integer programming model to minimise the management cost and meet the customer’s needs under different manufacturing constraints is proposed. Otherwise, An adaptation of the well-known Silver and Meal (SM) heuristic and two hybrid method approaches (HM1 and HM2) providing approximates solutions are developed. The mixed integer model was tested on Cplex (Software optimizer), and the obtained results were compared with the ones provided by the adapted heuristic SM and the hybrid methods. The numerical analyses show that hybrid methods provide good-quality solutions in a moderate computational time. The proposed model establishes a collegial and an integrated process that sets values, goals, decisions and priorities along the considered supply chain while taking into account the environmental aspect.     

Joint hybrid repair and remanufacturing systems and supply control

The control of a stochastic manufacturing system that executes capital asset repairs and remanufacturing in an integrated system is examined. The remanufacturing resources respond to planned returns of worn-out equipment at the end of their expected life and unplanned returns triggered by major equipment failures. Remanufacturing operations for planned demand can be executed at different rates and costs corresponding to different replacement and repair modes. The replacement components inventory is provided by an upstream supply with random lead times. The objective is to determine a control policy for both the supply and remanufacturing activities that minimises the average repair/replacement, acquisition and inventory/shortage total cost over an infinite horizon. We propose a suboptimal joint remanufacturing and supply control policy, composed of a multi-hedging point policy (MHPP) for the remanufacturing stage and an (s, Q) policy for the replacement parts supply. The MHPP is based on two inventory thresholds that trigger the use of predefined remanufacturing modes. Control policy parameters are obtained combining analytical modelling, simulation experiments and response surface methodology. The effects of the distribution, mean and variability of the lead time are tested and a sensitivity analysis of cost parameters is conducted to validate the proposed control policy. We also show that our policy leads to a significant cost reduction as compared to a combination of a hedging point policy (HPP) and an (s, Q) policy.     

面向环境的设备维护管理与再制造工程集成模式

在分析再制造工程与设备维护管理的理论体系及二者关系的基础上,从有效利用资源、提升设备的使用效能的角度出发,运用质量功能展开(Quality Function Display,简称QFD)方法,提出了一种面向环境需求的设备维护管理和再制造工程的集成模式。     

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.     

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。     

授权模式下OEM和第三方的生产和回收定价竞争策略

假设第三方再制造商（第三方）需要向原始设备制造商（OEM）缴纳授权费才能进行回收再制造，OEM和第三方在正向供应链销售市场与逆向供应链回收市场均存在竞争。文章建立了以双方闭环供应链利润最大化为目标带约束条件的古诺博弈模型，通过K-T条件求出第三方部分再制造和第三方完全再制造两种情形下两企业最优的产品生产量以及废旧品回收价格。最后分别通过解析方法和数值算例分析了单位授权费等参数对决策变量和最优利润的影响。     

An effective discrete harmony search algorithm for flexible job shop scheduling problem with fuzzy processing time

This study addresses flexible job shop scheduling problem (FJSP) with fuzzy processing time. The fuzzy or uncertainty of processing time is one of seven characteristics in remanufacturing. A discrete harmony search (DHS) algorithm is proposed for FJSP with fuzzy processing time. The objective is to minimise maximum fuzzy completion time. A simple and effective heuristic rule is proposed to initialise harmony population. Extensive computational experiments are carried out using five benchmark cases with eight instances from remanufacturing. The proposed heuristic rule is evaluated using five benchmark cases. The proposed DHS algorithm is compared to six metaheuristics. The results and comparisons show the effectiveness and efficiency of DHS for solving FJSP with fuzzy processing time.     

Dynamic disassembly planning for remanufacturing of multiple types of products

With the increased need for remanufacturing of end-of-life products, achieving economic efficiency in remanufacturing is urgently needed. The purpose of this study was to devise a cost-minimisation plan for disassembly and remanufacturing of end-of-life products returned by consumers. A returned end-of-life product is disassembled into remanufacturable parts, which are supposed to be used for new products after being remanufactured. Each end-of-life product is disassembled into parts at variable levels and through variable sequences as needed, taking into account not only disassembly but also manufacturing, remanufacturing, and holding inventory of remanufacturable parts. This study proposes a mixed integer linear programming (MILP) model for derivation of the optimal disassembly plan for each returned product, under deterministically known demand and return flows. For the purposes of an illustrative example, the proposed model was applied to the formulation of an optimal disassembly and remanufacturing plan of ‘fuser assembly’ of laser printers. The solution reveals that variable-level disassembly of products saves a significant remanufacturing cost compared with full disassembly.     

Redesigning an integrated forward–reverse logistics system for a third party service provider: an empirical study

This paper models the logistics business for a large third party service provider and incorporates both forward and reverse product flows for the company. The model that we propose in this paper incorporates price, transportation mode and outsourcing cost. We compare our model with a reduced model that was obtained from past literature and show through Monte Carlo simulation the superiority of the full model in profit generation for the third party service provider. The full model considers multiple transportation modes across the forward and reverse logistics network based on the firm's business structure, whereas the reduced model has only one transportation option from point to point. Additionally, the full model allows for an option to outsource remanufacturing unlike the reduced model that does not permit such outsourcing options. One of the major contributions of this paper is a thorough analysis through the incorporation of pricing and transportation mode of an integrated forward and reverse logistics supply chain.     

Heuristics for solving disassemble-to-order problems with stochastic yields

Within the realm of reverse logistics, remanufacturing has become renowned as a popular option in many reverse logistics settings. In remanufacturing, firms take back products at the end of their use, disassemble them to obtain components, and reassemble these components into a “good as new” remanufactured product. As a process, remanufacturing requires parts as an input, parts which are gained mostly from recovered products. As the quality of the returned products are not known in advance, likewise the amount of good quality parts recovered from the returned product is subject to uncertainty. In this paper, we develop two heuristics of different sophistication which take into consideration that the yields of disassembly are stochastic. The methodology is further illustrated with a numerical example, and performance of the heuristics is examined through a performance study. The performance study indicates excellent performance for the more sophisticated heuristic, but also reveals under which conditions the more simple heuristic can be recommended for application.     

Optimal core acquisition and pricing strategies for hybrid manufacturing and remanufacturing systems

In this study, we combine two aspects of remanufacturing, namely product acquisition management and marketing (pricing) of the remanufactured products. We consider an original equipment manufacturer (OEM) who decides on the acquisition prices offered for returns from different quality types and on selling prices of new and remanufactured products, in a single period setting. We develop a procedure for determining the optimal prices and corresponding profit of the OEM, and conduct a sensitivity analysis to understand the effect of different model parameters on the optimal strategies and profit. An important managerial insight is that the optimal solution is not to have the same profit per remanufactured item for all return types, but to if the minimum cost for acquisition and remanufacturing of some core type is lower.