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Allocation of external returns of different quality grades to multiple stages of a closed loop supply chain |
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| Affiliation: | 1. Chennai Business School, Chennai, India;2. Department of Management Studies, Indian Institute of Technology, Madras, India;3. School of Information Systems, Curtin Business School, Curtin University, Australia;1. School of Management, Guangdong University of Technology, Guangzhou, 510520, China;2. Katz Graduate School of Business, University of Pittsburgh, Pittsburgh, PA, 15260, United States;3. Business School, Jiangnan University, Wuxi, 214122, China;1. School of International Business Administration, Shanghai University of Finance and Economics, Shanghai, PR China;2. Tourism and Event Management School, Shanghai University of International Business and Economics, Shanghai, PR China;3. Faculty of Business, University of Greenwich, London SE10 9LS, UK;1. Mechanical and Aerospace Engineering, University at Buffalo, State University of New York, Buffalo, NY, USA;2. Industrial and Systems Engineering, University at Buffalo, State University of New York, Buffalo, NY, USA;1. Department of Industrial Engineering, Qafqaz University, Baku, Azerbaijan;2. Department of Mechanical and Industrial Engineering, Ryerson University, Toronto, ON M5B 2K3, Canada;1. School of Transportation and Logistics, Southwest Jiaotong University, Chengdu, Sichuan 610031, China;2. Institute for Logistics and Emergency Management, School of Economics and Management, Southwest Jiaotong University, Chengdu, Sichuan 610031, China |
| Abstract: | A single period multistage closed loop supply chain (CLSC) is presented here considering simultaneous manufacturing of new products and remanufacturing of customer returned used products. The quantity of used products in reverse supply chain considered in the model is a fraction of the new products manufactured in the forward supply chain. Used products of known quantity are pulled from end customers as per quality grades. Products are assumed to be mechanical in nature and remanufacturer has to pay different acquisition prices for different quality grades of return. The groups of graded products based on the acquisition prices are thus sorted and sent to stages of CLSC earmarked for them as per demand for repairing/recycling of raw materials. After repairing/refurbishing and recycling at each stage of reverse supply chain the used parts/products become part of forward supply chain. In this paper, a nonlinear maximizing profitability function for CLSC has been formulated for the system with a price dependent demand for n-stages. The decision variables are selling price of product and percentage return of graded used products entering into different stages. A numerical example for a three stage model illustrates the method followed by managerial insight. |
| Keywords: | Remanufacturing Acquisition price Reverse supply chain External returns Quality grade Nonlinear optimization |
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