Abstract
Core acquisition is essential to the success of the remanufacturing business. The value of sorting and grading cores into nominal-quality classes has been certified in industry and academia. In this paper, we investigate how many unsorted cores of uncertain quality should be acquired and how many sorted cores should be remanufactured by a third-party remanufacturer (3PR) before the demand is realized. We first develop analytically tractable solutions to the acquisition and production model under deterministic demand, and then we extend it to the model under the stochastic demand by fully characterizing the structure of the optimal policy. Subsequently, we investigate the impact of core quality fraction uncertainty on the solutions. Finally, numerical analyses are conducted to further verify the proposed models. The results are as follows. First, the optimal quantity of acquisition/production and minimum expected profit increase with an increase in the selling price and decrease with an increase in the uncertainty of demand and acquisition cost. Second, the optimal production quantity does not decrease in acquisition quantity, and the rate of utilization of the recycled parts (the ratio of production quantity to acquisition quantity) increases with a decrease in the acquisition cost. Third, the growth stage is most profitable stage, so the remanufacturers should pay more attention to remanufacturing activities early in the life of products. The proposed models and solutions can not only solve the core acquisition and production problem in remanufacturing, but also solve the combinatorial optimization problem.
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Disclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.