Mixed Policies for Recovery and Disposal of Multiple-Type Consumer Products

Abstract

New European government policies aim at the closure of material flows as part of integrated chain management (ICM). One of the main implementation instruments is extended producer responsibility, which makes original equipment manufacturers (OEMs) formally responsible for take-back, recovery, and reuse of discarded products. One of the key problems for OEMs is to determine a recovery strategy, i.e., determine to what extent return products must be disassembled and which recovery and disposal (RD) options should be applied. On a tactical management level, this involves anticipation of problems such as meeting legislation, limited volumes of secondary end markets, bad quality of return products, and facility investments in recycling infrastructure. In this paper, a model is presented that can be used to determine a recovery strategy for multiple-type consumer products. The objective function incorporates technical, ecological, and commercial decision criteria and optimization occurs using a two-level optimization procedure. First, a set of potential product recovery and disposal (PRD) strategies is generated for each separate product type. Secondly, optimal PRD strategies are assigned to the products within a coherent multiproduct or product group policy. The aim is to find an optimal balance between maximizing net profit and meeting constraints like recovery targets, limited market volumes, and processing capacities. A TV case is worked out to illustrate the working of the model. Also, the managerial use of the model is discussed in view of establishing an economically and ecologically sound base for achieving ICM.