Determining the optimal quantity and quality levels of used product returns for remanufacturing under multi-period and uncertain quality of returns

Abstract

Managing product returns has been considered essential in the production planning and control of remanufacturing, as well as in the inventory control management of product returns. Uncertainties in the quantity and quality of returned products collected for remanufacturing could largely affect the profit generated from remanufactured products. However, determining the optimal quantity and quality levels of used products to be collected for remanufacturing in multiple periods under uncertain quality of the returns has not been properly addressed in previous studies. On the other hand, the effects of new product sales and demand for remanufactured products on used product returns, as well as the effect of quality of returns on the take-back and remanufacturing costs, have not been properly considered in previous studies. In this paper, a novel methodology is proposed to determine the optimal product returns for remanufacturing with consideration of the uncertainty in the quantity and quality of returns and study the effects of new product sales and demand for remanufactured products on used product returns, as well as the effect of quality of returns on the remanufacturing cost. A case study of determining the optimal returns of tablet PCs is conducted to illustrate the proposed methodology.