Independent Remanufacturer Research Articles

Integrated marketing and operational decisions in remanufacturing of end-of-life products: model and hybrid solution algorithms

Remanufacturing is the ultimate form of product recovery with substantial economic and environmental advantages. However, despite growing popularity of remanufacturing, marketing issues such as pricing and warranty as well as accounting for the multi-component nature of remanufactured products are not adequately addressed in the literature. In this paper, we consider an independent remanufacturer (IR) who acquires multi-component end-of-life (EOL) products in different quality classes, remanufactures them and sells the recovered products bundled with warranty. The remanufacturer is interested in optimal acquisition prices of return products (known as cores) in different quality groups, the remanufacturing plan for each component, the selling price of the final product and the length of the warranty period to maximise its net profits. A mixed-integer nonlinear program is developed to address the problem where reliability and warranty issues are statistically incorporated into the model and PSO and GA algorithms hybridised with convex quadratic programming (CQP) are proposed for its solution.

Selection of buyback price for OEM for efficient spare parts management in remanufacturing business

Article history: Received March 20, 2014 Received in revised format November 18, 2015 Accepted December 18 2015 Available online December 19 2015 Authors developed a two-period buyback pricing model which shows a competition between independent repair shop, third party remanufacturer (TPR) and original equipment manufacturer (OEM) for market share in spare parts business after the end of warranty period. Remanufacturing is a profitable option for OEM rather than producing new parts after finishing the warranty period for satisfying the demand of spare parts. OEM acquires damaged/broken parts from local independent repair shop to remanufacture those parts. But if there existed any Third Party Remanufacturer (TPR) then it would lead competition and would decrease the market share of OEM in sales of spare parts. TPR is basically independent remanufacturer. OEM has no control over the activity of the TPR for selling remanufactured spare parts after finishing warranty period of the products. In this paper, authors considered a supply chain model, where independent repair shop is responsible for handling the repair process and both OEM and TPR are remanufacturing spare parts. Repair shop may procure spare parts from both OEM and TPR. A discount is given on the price of the spare parts by TPR which attracts the customers. Repair shop also tries to sell repaired parts at an attractive discounted price. Both TPR and OEM need to collect broken/damaged parts to remanufacture them for maintaining an inventory of spare parts. This paper aimed to develop a deterministic framework for finding optimal buyback price for the OEM and the impact of different parameters on the profitability of spare parts management for individual players of supply chain management. rowing Science Ltd. All rights reserved. G 6 © 201

Demand forecasting for production planning in remanufacturing

Remanufacturing is effective for energy and material savings; however, production planning and control in remanufacturing are more complex than those in traditional manufacturing. Developing a reliable forecasting method is critical for facilitating effective production planning and control. This study examined the effectiveness of demand forecasting in remanufacturing by time series analysis. Most existing methods of demand forecasting in remanufacturing assume that the time distributions of new product sales are known and that the time distributions of the demands of remanufactured products are determined by adding the product lifespan to the time distribution of new product sales. In addition, most previous studies focused on relatively long-term demand trends without considering the seasonality of demands. In this study, we examined the Holt–Winters model and the autoregressive integrated moving average (ARIMA) model, both representative time series analysis methods. These methods do not require information regarding the time distributions of new product sales and can handle the seasonality of demands. To examine the effectiveness of these methods, the time series data of the sales of 160 types of remanufactured alternators and starters manufactured by an independent auto parts remanufacturer over a period of 12 years was used. The results of demand forecasting for 2 months yielded average errors of 26.7 % for alternators and 18.4 % for starters, which represent an average improvement of 6.5 points compared to the method involving referencing the demands of the same month of previous year. The implications of the results and future steps are also discussed.

Buying used products for remanufacturing: negotiating or posted pricing

Product reclamation is a critical process in remanufacturing. It is generally assumed in the literature that customers simply want to get rid of their used products without expecting any compensation for them. Some authors have only recently started looking into firms that offer a posted (fixed) price for them. Following recent reports suggesting that customers are increasingly open to bargaining, we compare using a posted price and bargaining to obtain used products. In our analysis, we consider an original manufacturer acting as a monopolist as well as a manufacturer and an independent remanufacturer acting in a duopoly. We analytically show that bargaining is always beneficial to the monopoly manufacturer. In the duopoly case, we distinguish a Cournot competition and a market with the manufacturer as Stackelberg leader. The results of a numerical study show that both firms will use posted pricing in the Cournot competition, especially if bargaining is not costless. By contrast, the remanufacturer can significantly increase his profit by using negotiations if he is the Stackelberg follower.

Competitive Quality Choice and Remanufacturing

We consider an original equipment manufacturer (OEM) who faces competition from an independent remanufacturer (IR). The OEM decides the quality of the new product, which also determines the quality of the competing remanufactured product. The OEM and the IR then competitively determine their production quantities. We explicitly characterize how the OEM competes with the IR in equilibrium. Specifically, we show that the OEM relies more on quality as a strategic lever when it has a stronger competitive position (determined by the relative cost and value of new and remanufactured products), and in contrast it relies more heavily on limiting quantity of cores when it has a weaker competitive position. The IR's entry threat as well as its successful entry can decrease the consumer surplus. Furthermore, our results illustrate that ignoring the competition or the OEM's quality choice leads to overestimating benefits of remanufacturing for consumer and social welfare. In addition, we show an IR with either a sufficiently weak competitive position (so the OEM deters entry) or a sufficiently strong one (so the OEM is forced to limit quantity of cores) is desirable for reducing the environmental impact. Comparing our results with the benchmark in which the OEM remanufactures suggests that encouraging IRs to remanufacture in lieu of the OEMs may not benefit the environment. Furthermore, the benchmark illustrates that making remanufacturing more attractive improves the environmental impact when the remanufacturer is the OEM, while worsening it when remanufacturing is done by the IR.