Optimal acquisition price management in a remanufacturing system

Abstract

Return items received from end customers for remanufacturing is uncertain in nature. In this paper, we considered that return demand function is uncertain and sensitive to the acquisition price and the availability of used products in the market. A mathematical model was developed to investigate the impact of the availability of return items in the market on acquisition price management. Here, three different methods of collection of return items from the market are considered: direct method, indirect method and coordinated method. A numerical study was conducted to illustrate the mathematical model, and an extensive sensitivity analysis was carried out for the three different methods of collection to examine the impact of market size and the available dependency factor on acquisition price and the channel profit. The results show that the total channel profit increases when the acquisition price increases for the direct method of collection. Furthermore, the results reveal that the total channel profit increases when the market size increases for the coordinated method of collection compared with the other two methods of collection.