Assessing the benefits of remanufacturing option under one-way substitution

In this study, we consider a segmented market for a product that can either be manufactured or remanufactured. It is assumed that the remanufactured products can be substituted by the new ones. A steady-state profit model is constructed under certain environmental assumptions on capacity requirement...

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Bibliographic Details
Published in:The Journal of the Operational Research Society 2005-03, Vol.56 (3), p.286-296
Main Authors: Bayındır, Z P, Erkip, N, Güllü, R
Format: Article
Language:English
Subjects:
Applied sciences
Carrying costs
Costs
Customers
Environmental impact
Environmental policy
Exact sciences and technology
Inventories
Inventory
Inventory control
Inventory management
Investigations
Manufactured products
Manufacturers
Manufacturing
Market prices
Markov analysis
Mathematical models
Monopolies
one-way substitution
Operational research. Management science
Operations research
Order quantity
Price levels
Production management
Profit margins
Profits
Random variables
Remanufactured products
Remanufacturing
Studies
Theoretical Papers
Unit costs
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Summary:In this study, we consider a segmented market for a product that can either be manufactured or remanufactured. It is assumed that the remanufactured products can be substituted by the new ones. A steady-state profit model is constructed under certain environmental assumptions on capacity requirements of operations, and revenue and cost schemes. Exact steady-state probabilities of the Markovian model constructed are solved via matrix geometric techniques. An extensive computational study is performed to investigate the conditions under which the utilization of remanufacturing option and the use of one-way substitution policy increase the average expected profit.
ISSN:0160-5682
1476-9360
DOI:10.1057/palgrave.jors.2601799