Research On E-product Remanufacturing Decision Models

In recent years,it becomes difficult for products with only basic functions to meet people's needs.Their preference for products has been greatly changed with the advancing technology.Take an e-product(electronic product)for example,people may want an e-product with perfect design,versatile functions,durable battery and high resolution.Such needs lead to the shortened product life cycle,the increase of update,and more e-wastes,posing great risk to the environment.Consequently,product take-back legislations have been enacted in different countries and regions to tackle such environmental problems.These legislations aim to require the manufacturers be responsible for a proper and safe treatment of end of life products.In this dissertation,based on the review of literature,we model a profit-maximizing manufacturer that produces e-product through operation research methods and examine the impact of take-back regulation on the manufacturer's decisions.(1)DR:Without loss of generality,we assume that all the used products which are collected are qualified to be remanufactured.The problem facing the manufacturer is a four-stage model.(a)The manufacture sets the new product price;(b)The manufacturer identifies the optimal collection rate sold in the previous stage;(c)The manufacturer determines the optimal remanufacturing quantity;(d)The manufacturer decides the price for the remanufactured product.(2)DCR:We extend model DR to DCR,and consider the case when there exists competition between new and remanufactured products.The problem facing the manufacturer is a three-stage model.(a)The manufacturer determines new product price(only new products exist in the first stage);(b)The manufacturer set the collection rate;(c)The manufacturer decides both new and remanufactured products simultaneously.(3)SR:We relax the assumption of case(1),and consider the scenario where a fraction r of product collected are qualified for remanufacturing,i.e.,r is a random variable which is normally distributed between 0 and 1.Analogously to(1),the problem facing the manufacturer is a four-stage model.(4)SCR:By combining case(2)and case(3),we identify how the manufacturer's decisions are affected under stochastic and competition.Similar to case(2),the problem facing the manufacturer is a three-stage model.In this paper,we use backward induction to solve for the multiple stage models and indentify conditions under which the manufacturer's optimal decisions are obtained.Our results show that:(1)Deterministic Model(a)When the inverse operating cost is lower than the salvage value of remanufactured product,the manufacturer has the economic incentive to collect all the used products,and the manufacturer's optimal decisions have nothing to do with take-back regulation;Under the case when there is no competition between new and remanufactured products and when the inverse operating cost is higher than the secondary market potential,the manufacturer should choose the minimum collection rate mandated by the government and does not involve in the collection of used products under no take-back regulation;However,when the inverse operating cost does not fall on the two opposite ends of the spectrum,We identify five remanufacturing strategies the manufacturer can choose as a function of the inverse operating cost and new product manufacturing cost,and each strategy has the unique solution.(b)Under the case when there is competition between new and remanufactured products and when the inverse operating cost is higher than the product of substitution intensity and new product manufacturing cost,the manufacturer has no economic incentive to collect used products.(2)Stochastic ModelWhen the inverse operating cost is lower than the sum of the salvage value of used and remanufactured product,the manufacturer has the economic incentive to collect all the used products,and the regulation does not exert effect on the manufacturer's decision;Under the case when there is no product competition and when the inverse operating cost is higher than the sum of the salvage of used product and the secondary market potential,collecting used products is not beneficial to the manufacturer;Similar to the deterministic model,the manufacturer either collects all the used product or collects nothing when the inverse operating cost goes to extreme;However,when the operating cost is at moderate level,We identify six remanufacturing strategies the manufacturer can choose as a function of the inverse operating cost and new product manufacturing cost,and each strategy has the unique solution.(b)Under the case when there is product competition and when the inverse operating cost is higher than the sum of the salvage of used product and the product of substitution intensity and new product manufacturing cost,take-back regulation has negative impact on the manufacturer's performance.(3)Deterministic and Stochastic Model(a)The optimal collection rate is increasing as the secondary market potenial,the new product manufacturing cost,salvage value for used and remanufactured product,and substitution intensity increases;(b)The manufacturer's performance without regulation is always higher than or equal to that with regulation;(c)When the optimal collection rate does not fall on the two ends of the spectrum,new product price is quiet independent of collection rate and inverse operating cost and only depends on its own manufacturing cost,which is same as the case when there is no product take-back regulation.Finally,we use apple product(iPad mini 2 Wi-Fi+Cellular 32GB for AT&T)to verify our models(SR and SCR).Numerical results suggest that our models are robust and applicable,which is useful for the manufacturer to make decisions.