Green-product-design value and information-technology investment on replenishment model with remanufacturing

Abstract

Environmental issues, resource re-usage and information technology applications (ITA) are gaining interest in supply chain management researches. Critical environmental legislation has become common in all level of company operations. Green product design has a significant influence on the cost of purchase, disassembly, component inspection and repair, remanufacturing and recycling. Recently, the development and improved capabilities of ITA have changed the ways in which the supply chain operates. However, the traditional inventory model considers a case in which depletion of inventory is caused by a constant rate. In practice, there is an inventory loss due to deterioration. This paper investigates the impact of the green product design, the deteriorating factor and the ITA investment in business process considering remanufacturing. An integrated inventory deteriorating model is developed, considering green product design and remanufacturing. The integrated production-inventory deteriorating model for replenishment policy and distribution planning is derived utilising a time-weighted inventory approach. A numerical example is presented to demonstrate the theory. The results show that new technology evolution, reusable-item take-back ratio and direct shipment are the critical operation factors in green product design and ITA investment.