Selection of return channels and recovery options for used products

Due to legal, economic and socio-environmental factors, reverse logistics practices and extended producer responsibility have developed into a necessity in many countries. The end results and expectations may differ, but the motivation remains the same. Two significant components in a reverse logistics system -product recovery options and return channels - are the focus of this thesis. The two main issues examined are allocation of the returned products to recovery options, and selection of the collection methods for product returns. The initial segment of this thesis involves the formulation of a linear programming model to determine the optimal allocation of returned products differing in quality to specific recovery options. This model paves the way for a study on the effects of flexibility on product recovery allocation. A computational example utilising experimental data was presented to demonstrate the viability of the proposed model. The results revealed that in comparison to a fixed match between product qualities and recovery options, the product recovery operation appeared to be more profitable with a flexible allocation. The second segment of this thesis addresses the methods employed for the initial collection of returned products. A mixed integer nonlinear programming model was developed to facilitate the selection of optimal collection methods for these products. This integrated model takes three different initial collection methods into consideration. The model is used to solve an illustrative example optimally. However, as the complexity of the issue renders this process ineffective in the face of larger problems, the Lagrangian relaxation method was proposed to generate feasible solutions within reasonable computational times. This method was put to the test and the results were found to be encouraging

Applying Revenue Management to the Reverse Supply Chain

We study the disposition decision for product returns in a closed-loop supply chain. Motivated by the asset recovery process at IBM, we consider two disposition alternatives. Returns may be either refurbished for reselling or dismantled for spare parts. Reselling a refurbished unit typically yields higher unit margins. However, demand is uncertain. A common policy in many firms is to rank disposition alternatives by unit margins. We show that a revenue management approach to the disposition decision which explicitly incorporates demand uncertainty can increase profits significantly. We discuss analogies between the disposition problem and the classical airline revenue management problem. We then develop single period and multi-period stochastic optimization models for the disposition problem. Analyzing these models, we show that the optimal allocation balances expected marginal profits across the disposition alternatives. A detailed numerical study reveals that a revenue management approach to the disposition problem significantly outperforms the current practice of focusing exclusively on high-margin options, and we identify conditions under which this improvement is the highest. We also show that the value recovered from the returned products critically depends on the coordination between forward and reverse supply chain decisions

A Simulation-based Methodology to Compare Reverse Logistics System Configuration Considering Uncertainty

With increasing environmental concerns, recovery of used products through various options has gained significant attention. In order to collect, categorize and reprocess used products in a cost and time efficient manner, a pre-evaluated network infrastructure is needed in addition to existing traditional forward logistics networks, in most cases. However, such networks, which are referred to as reverse logistics networks, impose inherent uncertainty in returned product supply and challenges additional to forward networks. Incorporating uncertainty in long term decisions with regards to network planning is significant especially in RL networks, since such decisions are difficult and costly to adjust later on. Uncertainty in product returns, dynamic and complex behavior of the system can be modeled as a queueing model, using a discrete event simulation methodology. In this work, a simulation based tool is developed which can be used as a platform for evaluating and comparing reverse logistics network configurations. In addition to defining system parameters, the tool provides experimentation with the number of collection, sorting, and processing centers, as well as the standard deviation of the return rate distribution. Various types of experiments are used in order to illustrate the use and goal of the tool, where the trade-offs within and across scenarios are addressed. Experiments are divided into three main parts; verification, pairwise detailed and a final more holistic scenario which illustrates the usage of the tool. A user interface is developed via Microsoft Excel for convenient specification of operational system parameters and scenario values. Upon running the simulation with specified experimental factors, the tool automatically computes and displays the total weighted score of each scenario, which is an indicator of the scenario quality

Optimal scope of supply chain network & operations design

The increasingly complex supply chain networks and operations call for the development of decision support systems and optimization techniques that take a holistic view of supply chain issues and provide support for integrated decision-making. The economic impacts of optimized supply chain are significant and that has attracted considerable research attention since the late 1990s. This doctoral thesis focuses on developing manageable and realistic optimization models for solving four contemporary and interrelated supply chain network and operations design problems. Each requires an integrated decision-making approach for advancing supply chain effectiveness and efficiency. The first model formulates the strategic robust downsizing of a global supply chain network, which requires an integrated decision-making on resource allocation and network reconfiguration, given certain financial constraints. The second model also looks at the strategic supply chain downsizing problem but extends the first model to include product portfolio selection as a downsizing decision. The third model concerns the redesign of a warranty distribution network, which requires an integrated decision-making on strategic network redesign and tactical recovery process redesign. The fourth model simultaneously determines the operational-level decisions on job assignment and process sequence in order to improve the total throughput of a production facility unit

Optimizing the Disposition and Retrograde of United States Air Force Class VII Equipment from Afghanistan

To meet the President\u27s established OPERATION ENDURING FREEDOM drawdown date of 1 December 2014, the United States Air Force, while continuing to conduct and support combat operations, must begin to plan disposition and execute retrograde its Class VII equipment. Calling upon concepts utilized in the management of closed-loop supply chains and optimization, this research proposes a multiple objective linear program to optimize the alignment of Bagram and Kandahar Air Base positioned equipment with in-garrison demand. Closed-loop supply chains provide planning process guidelines necessary for second use value creation and efficient reverse logistical flows. Optimization concepts provide the methodology for model development and output. The proposed multiple objective model provides solutions and equipment disposition instructions that minimize the deviations from the lowest total surface transportation cost and maximum average demand satisfaction values. To ensure compliance with Air Force guidance on equipment prioritization, cost-efficient transportation and maximum amounts of supply, multiple pre-process and model constraints limit the allocation of supply to demand bases. Combining situational specific user input values and constraints provides United States Air Force equipment managers the ability to test multiple courses of action for both real-time and future equipment movements

Effective medical surplus recovery

We analyze not-for-profit Medical Surplus Recovery Organizations (MSROs) that manage the recovery of surplus (unused or donated) medical products to fulfill the needs of underserved healthcare facilities in the developing world. Our work is inspired by an award-winning North American non-governmental organization (NGO) that matches the uncertain supply of medical surplus with the receiving parties’ needs. In particular, this NGO adopts a recipient-driven resource allocation model, which grants recipients access to an inventory database, and each recipient selects products of limited availability to fill a container based on its preferences. We first develop a game theoretic model to investigate the effectiveness of this approach. This analysis suggests that the recipient-driven model may induce competition among recipients and lead to a loss in value provision through premature orders. Further, contrary to the common wisdom from traditional supply chains, full inventory visibility in our setting may accelerate premature orders and lead to loss of effectiveness. Accordingly, we identify operational mechanisms to help MSROs deal with this problem. These are: (i) appropriately selecting container capacities while limiting the inventory availability visible to recipients and increasing the acquisition volumes of supplies, (ii) eliminating recipient competition through exclusive single-recipient access to MSRO inventory, and (iii) focusing on learning recipient needs as opposed to providing them with supply information, and switching to a provider-driven resource allocation model. We use real data from the NGO by which the study was inspired and show that the proposed improvements can substantially increase the value provided to recipients

E-Fulfillment and Multi-Channel Distribution – A Review

This review addresses the specific supply chain management issues of Internet fulfillment in a multi-channel environment. It provides a systematic overview of managerial planning tasks and reviews corresponding quantitative models. In this way, we aim to enhance the understanding of multi-channel e-fulfillment and to identify gaps between relevant managerial issues and academic literature, thereby indicating directions for future research. One of the recurrent patterns in today’s e-commerce operations is the combination of ‘bricks-and-clicks’, the integration of e-fulfillment into a portfolio of multiple alternative distribution channels. From a supply chain management perspective, multi-channel distribution provides opportunities for serving different customer segments, creating synergies, and exploiting economies of scale. However, in order to successfully exploit these opportunities companies need to master novel challenges. In particular, the design of a multi-channel distribution system requires a constant trade-off between process integration and separation across multiple channels. In addition, sales and operations decisions are ever more tightly intertwined as delivery and after-sales services are becoming key components of the product offering.Distribution;E-fulfillment;Literature Review;Online Retailing

The role of water markets in climate change adaptation

Abstract Water markets were first introduced in Australia in the 1980s, and water entitlement and allocation trade have been increasingly adopted by both private individuals and government.Irrigators turned to water markets (particularly for allocation water) to manage water scarcity and Governments to acquire water for the environment (particularly water entitlements. It is expected that further adoption of water markets will be essential for coping with future climate change impacts. This report reviews the available literature related to the relationship between southern Murray-Darling Basin (sMDB) water markets and anticipated climate change effects; the economic, social and environmental impacts of water reallocation through markets; and future development requirements to enhance positive outcomes in these areas. The use of water markets by irrigators can involve both transformational (selling all water entitlements and relocating or switching to dryland) and incremental (e.g. buying water allocations/entitlements, using carry-over, changing water management techniques) adaptation to climate change. Barriers to both adaptations include: current and future climate uncertainty; poor (or non-existent) market signals; financial constraints; information barriers; mental processing limits; inherent attitudes toward or beliefs about climate change; institutional barriers and disincentives to adapt. A better understanding of trade behaviour, especially strategic trade issues that can lead to market failures, will improve the economic advantages of water trade. There remains community concerns about the impacts of transfers away from regional areas such as reduced community spending and reinvestment; population losses; loss of jobs; declining taxation base, loss of local services and businesses, regional production changes; and legacy issues for remaining farmers. However, it is hard to disentangle these impacts from those caused by ongoing structural change in agriculture. Rural communities that are most vulnerable to water scarcity under climate change and water trade adjustment include smaller irrigation-dependent towns. Communities less dependent on irrigation are better able to adapt. Further, where environmental managers use water markets to deal with water variability and to ensure ecological benefits, irrigators are concerned about its impact on their traditional use of markets to manage scarcity. Climate change and water scarcity management are intertwined, suggesting that policy, institutional and governance arrangements to deal with such issues should be similarly structured. Water users will adapt, either out of necessity or opportunity. The cost of that adaptation at individual, regional and national levels—particularly to future water supply variability—can be mitigated by the consideration of the existing advantages from future opportunities for water marketing in Australia

AGRICULTURE IN AN ECOSYSTEMS FRAMEWORK

By broadening the definition of an ecosystem to include economic activities, can we better characterize the interactions and relationships among agricultural activities and important indicators of ecological system health? This paper addresses research approaches for assessing the role of agriculture in an ecosystems context. Environmental regulation and resource management policies have heightened the interest in understanding interactions among agricultural activities and the natural resource base, including the impacts of agriculture on environmental quality and the impacts on agriculture of ecosystem restoration efforts. What are the most meaningful indicators of environmental quality? Which agricultural practices and policies should be considered, along with which nonagricultural resource uses? Finally, does the evolving thinking about ecosystems permit us to link agricultural practices and policies more directly and meaningfully to conceptions of sustainability, of both natural and socioeconomic systems? This paper presents a brief synopsis of ecosystem management, drawing from several recent governmental initiatives. It then provides an overview of the economics of ecosystem management from the perspective of the role of agriculture; discusses two specific cases, the Pacific Northwest and South Florida; and concludes with a discussion of promising economic approaches, data needs, and caveats to those engaged in policy analysis involving ecosystem restoration.Environmental Economics and Policy,

The boomerang returns? Accounting for the impact of uncertainties on the dynamics of remanufacturing systems

Recent years have witnessed companies abandon traditional open-loop supply chain structures in favour of closed-loop variants, in a bid to mitigate environmental impacts and exploit economic opportunities. Central to the closed-loop paradigm is remanufacturing: the restoration of used products to useful life. While this operational model has huge potential to extend product life-cycles, the collection and recovery processes diminish the effectiveness of existing control mechanisms for open-loop systems. We systematically review the literature in the field of closed-loop supply chain dynamics, which explores the time-varying interactions of material and information flows in the different elements of remanufacturing supply chains. We supplement this with further reviews of what we call the three ‘pillars’ of such systems, i.e. forecasting, collection, and inventory and production control. This provides us with an interdisciplinary lens to investigate how a ‘boomerang’ effect (i.e. sale, consumption, and return processes) impacts on the behaviour of the closed-loop system and to understand how it can be controlled. To facilitate this, we contrast closed-loop supply chain dynamics research to the well-developed research in each pillar; explore how different disciplines have accommodated the supply, process, demand, and control uncertainties; and provide insights for future research on the dynamics of remanufacturing systems