Pricing decisions in a multicriteria setting for product recovery facilities

Unpredictability in the arrival time and quantity of discarded products at product recovery facilities (PRFs) and varying demand for recovered components contribute to the volatility in their inventory levels. Achieving profit under such capricious inventory levels and stringent environmental legisl...

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Bibliographic Details
Published in:Omega (Oxford) 2011-04, Vol.39 (2), p.186
Main Authors: Vadde, Srikanth, Zeid, Abe, Kamarthi, Sagar V
Format: Article
Language:English
Subjects:
Decision making models
Genetic algorithms
Inventory management
Multiple criteria decision making
Pricing policies
Sensitivity analysis
Studies
Online Access:Get full text
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Summary:Unpredictability in the arrival time and quantity of discarded products at product recovery facilities (PRFs) and varying demand for recovered components contribute to the volatility in their inventory levels. Achieving profit under such capricious inventory levels and stringent environmental legislations remains a challenge to many PRFs. This paper presents a multi-criteria decision model to determine a pricing policy that can simultaneously address two issues: stabilize inventory fluctuations and boost profits. The model considers that PRFs passively accepts discarded products as well as acquires them proactively if necessary. Under a multi-criteria setting, the current work determines prices of reusable and recyclable components to maximize revenue and minimize product recovery costs. A genetic algorithm is employed to solve the multi-criteria decision making problem. Sensitivity analysis is performed to investigate the effect of sorting yield, disassembly yield, and reusable component yield on the profits, prices, inventory levels, and disposal quantities. [PUBLICATION ABSTRACT]
ISSN:0305-0483
1873-5274