Optimal Decision Making for Capacitated Reverse Logistics Networks with Quality Variations

Increasing concerns about the environmental impact of production, product take-back laws and dwindling natural resources have heightened the need to address the impact of disposing end-of-life (EOL) products. To cope this challenge, manufacturers have integrated reverse logistics into their supply chain or chosen to outsource product recovery activities to third party firms. The uncertain quality of returns as well as uncertainty in return flow limit the effectiveness of planning, control and monitoring of reverse logistics networks. In addition, there are different recovery routes for each returned product such as reuse, repair, disassembling, remanufacturing and recycling. To determine the most profitable option for EOL product management, remanufacturers must consider the quality of returns and other limitations such as inventory size, demand and quantity of returns. The work in this dissertation addresses these pertinent aspects using two models that have been motivated by two remanufacturing facilities whereby there are uncertainties in the quality and quantity of return and capacitated inventories. In the first case, a disposition decision making model is developed for a remanufacturing process in which the inventory capacity of recoverable returns is limited and where there\u27s a constant demand to be met, for remanufactured products that meet a minimum quality threshold. It is assumed that the quality of returns is uncertain and remanufacturing cost is dependent on the quality grade. In this model, remanufacturing takes place when there is demand for remanufactured products. Accepted returns that meet the minimum quality threshold undergo the remanufacturing processes, and any unacceptable returns are salvaged. A continuous time Markov chain (CTMC) is presented as the modeling approach. The Matrix-Geometric solution methodology is applied to evaluate several key performance metrics for this system, to result in the optimal disposition policy. The numerical study shows an intricate trade-off between the acceptable quality threshold value and the recoverable product inventory capacity. Particularly, there are periodic system starvation whenever there is a mis-match between these two system metrics. In addition, the sensitivity analysis indicates that changes to the demand rate for remanufactured products necessitates the need to re-evaluate the existing system configuration. In the second case, a general framework is presented for a third party remanufacturer, where the remanufacturer has the alternative of salvaging EOL products and supplying parts to external suppliers, or remanufacture the disassembled parts to \u27as new\u27 conditions. The remanufacturing processes of reusable products and parts is studied in the context of other process variables such as the cost and demand of remanufactured products and parts. The goal of this model is to determine the return quality thresholds for a multi-product, multi-period remanufacturing setting. The problem is formulated as a mixed integer non-linear programming (MINLP) problem, which involves a discretization technique that turns the problem turns into a quadratic mixed integer programming (QMIP) problem. Finally, a numerical analysis using a personal computer (PC) remanufacturing facility data is used to test the extent to which the minimum acceptance quality threshold is dependent on the inventory level capacities of the EOL product management sites, varying operational costs and the upper bound of disposal rate

Revenue management for multiple product recovery options : a triangulation approach

In recent times large numbers of end-of-use/end-of-life returns have been the result of the increasing pressure from environmental legislations, particularly the directive on Waste Electrical and Electronic Equipment (WEEE) in the European Union. These returns incur acquisition costs and take-back operation costs regarded as a sunk cost by many industries. Thus, returned/recovered product valuation and marketing issues become crucial factors for survival and profitability of many firms in various sectors in today’s competitive world. The research undertaken is relevant as pricing and revenue management for recovered products. Indeed, this theme is considered as a niche research and the fifth phase (prices and markets) of the evolution of closed loop supply chain research. Hence, it has been noted as one of the most critical research areas in quantitative modelling for reverse logistics and closed loop supply chain management studies. The research area is in its early stage because it can be seen that only a handful of articles have been published in peer reviewed international journals, exploring a pricing and marketing decision of recovered products. Hence, there are significant opportunities to conduct pricing and revenue management research in reverse logistics, particularly with regard to multiple recovery options.The primary objective of this research work is to formulate three pricing models by using a non-linear programming approach to determine optimal profit-maximising acquisition prices and selling prices, together with UK-based case studies in the mobile phone and computer recycling businesses. Moreover, this research aims to formulate two simulation models based on these case companies by investigating the impact of the uncertainty element in terms of return quantity and reprocessing time on firm’s profit. The triangulation approach is employed, specifically the multilevel model comprising case studies, questionnaire survey, and empirical quantitative models in order to address the principal research questions i.e. “What are optimal acquisition prices of received mobile phones and optimal selling prices of reprocessed handsets?”, “What are optimal selling prices of reprocessed computers?”, and based on the total profit, “What if the model's parameters change?”The contribution of this research covers the generation of pricing and simulation models that are suitable for the recycled mobile phone and computer sector. The literature review discovers that the research on this subject lacks considerations of multiple recovery options, return rate and demand rate as exponential functions, recovery capacity limitation, product substitution policy, the element of uncertainty in terms of return quantity and reprocessing time, and multiple time periods. Hence, this research fulfils six main research gaps in academic literature as follows. First, this study takes multiple recovery options into account. Second, return and demand rate are modelled as an exponential function. Third, pricing and simulation models cope with a limit to recovery capacity. Fourth, models with product substitution policy are investigated. Fifth, the element of uncertainty in terms of return quantity and reprocessing time is added into proposed models. Finally, this study proposes models with multiple time periods.The results from this research work support current pricing and revenue management research and most importantly, the results generated from these proposed models can enhance managers’ decision making in recovery operations and reverse logistics

Improving Demand and Supply Balance in a Closed-Loop Supply Chain : A Case Study in a Dynamic Reuse Spare Part Business

Many companies have adopted closed-loop supply chain (CLSC) systems in pursuit of greener operations through reuse product offering. Contrary to traditional forward supply chains, CLSCs combine both supply chain directions, forward and reverse. As well, the CLSC incorpo-rates circular manufacturing process into the loop, such as repairing, refurbishing, or reman-ufacturing. The combination of multiple simultaneous processes leads to added complexity in a circular system. This results in a wide range of challenges faced by a CLSC. The CLSC pro-cess challenges present themselves as unbalanced demand for reuse products and supply for returning end-of-use cores. As a result, this study’s purpose was to identify the most critical challenges contributing to an unbalanced demand and supply. Also, the study aimed to pro-vide improvement proposals to improve the situation at the case company. To realise this purpose, the study followed the format of a qualitative case study with a maritime company Wärtsilä as the case company. The research data was collected using open interviews with eight key stakeholders involved in the case company’s CLSC. Data from the interviews was then transcribed and analysed with a thematic analysis method; categorising found challeng-es into challenge categories identified from the existing literature. To examine the most criti-cal CLSC challenges, the study performed a criticality analysis using Process Failure Mode & Effect Analysis (PFMEA). PFMEA assigned severity to each found challenge while also evaluat-ing the case company’s current methods for prevention and detection. The analysis resulted in 14 different challenge categories expected to contribute to unbalanced demand and sup-ply. Two new challenge categories, challenges with process knowledge and challenges with a missing seeding strategy, were added to the body of knowledge. Regarding criticality, seven challenge categories were found as critical. Critical challenges in reverse supply chain pro-cesses related to limited internal and external process knowledge and visibility of returning cores. Critical challenges in circular manufacturing processes related to low core availability, pull-ordering system, outdated inventory management practices, and a missing seeding strategy. Finally, the study proposed improvement proposals for the critical challenges that would result in more balanced demand and supply. These findings stress the individual needs of each CLSC system to perform in an optimal manner. The case company’s single source for cores created new challenges that were yet to be identified by the existing litera-ture. Also, the separation of critical challenges aids managers in focusing on the most critical ones in often problem-rich CLSCs

A PRELIMINARY FEASIBILITY FOR ESTABLISHING A MULTI-SPECIES MEAT PROCESSING PLANT IN SOUTHWESTERN NORTH DAKOTA

The number of small commodity livestock slaughter plants in the Upper Northern Plains region continues to decline. Significant factors contributing to this decline include: 1) pressure to consolidate, thereby capturing economies of scale; 2) relatively stringent federal inspection specifications, along with; 3) HACCP (Hazardous Analysis Critical Control Points) requirements. At the same time, consumer demand (markets) for specialty, selected, and exotic meats appears to be growing. For example, the recent market successes in Europe evidenced by the North American Bison Cooperative based in New Rockford, North Dakota. Several alternative livestock producer groups have emerged which include lamb, ratite, elk, deer, goat, poultry, rabbit, specialty beef, and organic livestock. These groups have expressed a need for slaughter and processing facilities to meet market demand. The economic question which then becomes foremost to developing a viable business enterprise is: "What is the critical threshold volume (CTV) of product required to succeed in terms of economic profit?" Specialty livestock is relatively new and production volume small in comparison to established commodity livestock such as cattle or hogs. This fact led researchers to consider the preliminary feasibility of a multi-species processing facility as a means of addressing the expressed need.multi-species, specialty meats, specialty livestock, alternative livestock, economies of scale, HACCP (Hazardous Analysis Critical Control Points), slaughter plants, processing plants, Community/Rural/Urban Development, Agribusiness,

A Bi-Objective Tactical Planning Model for the Reverse Supply Chain of Durable Products

Recent environmental legislations and customer awareness on environmental impacts of landfill activities as well as the profitability of reverse supply chains (RSC) have drawn the attention of researchers and companies to RSC management. RSCs include the series of activities from acquiring a used product until its recovery and sending it back to the market. In this thesis, we propose an integrated RSC tactical planning model under the context of complex durable products. The durable products consist of various types of components. This attribute makes them subject to the all disposition options, including remanufacturing, part harvesting, material and bulk recycling. The proposed model decides on the coordinated decisions on acquisition, disassembly, grading, and disposition activities in the reverse supply chain. Unlike the majority of works in the literature, our contributions include two objective functions addressing both financial and environmental criteria. Furthermore, we also consider two quality levels for returns, as well as a multi-indenture structure for the end-of-life (EOL) products, and consequently all possible recovery options in the RSC. We formulate the problem as a bi-objective, multi-period mixed integer linear programming (MILP) model. We applied the proposed model to an academic case study in the context of an EOL electronic device. The bi-objective model is solved by the aid of the epsilon-constraint method and a set of non-dominated solutions are provided. Finally, we conduct a set of sensitivity analysis tests for each objective function in order to determine the most significant parameters that affect the financial and environmental criteria in this problem

Reverse logistics service development of independent non-profit organization for reuse of computers: case - The Helsinki Metropolitan Area Reuse Centre Ltd.

Motivation for this thesis comes from the need to move towards circular economy, and the possibilities of better reuse of computers for the sake of the environment. Additionally, there is a clear lack of research concerning independent non-profit organizations in the reverse logistics arena. The aim of the research is to fill that gap and to examine the opportunities in computer reuse. The research questions were formulated to find answers to the surfaced questions: What are the drivers for engagement in reverse logistics? What different kinds of service models are there in the reverse logistics field? How reverse logistics systems are implemented? The methods used in this study are a literature review and a single case study method. First, a systematic literature review was conducted with the related search terms of product recovery management, reverse logistics, and third party logistics. Single case study method was used to gain insight into the drivers for engagement, type of business model and implementation of reverse logistics of a non-profit company. The reverse logistics operations development project for the case company, The Helsinki Metropolitan Area Reuse Centre Ltd., allowed to answer the questions presented and to build relevant knowledge about the subject. As a result, it was found that general characteristics of reverse logistics and its implementation apply no matter the circumstances. However, the case study shows that the drivers for engagement in reverse logistics of non-profit organization can differ greatly from traditional profit-seeking companies. For a non-profit company, the environmental and social aspects of the triple bottom line weigh more, and the financial incentives weigh less. Further, the independent role of a reverse logistics operator in the market imposes needs for active communication to reach consumers and collaborative companies alike, for the ends of acquiring more input products

판매촉진을 도입한 수요 불확실성 재고관리 모형

학위논문 (박사) -- 서울대학교 대학원 : 공과대학 산업공학과, 2020. 8. 문일경.As the globalization of markets accelerates competition among companies, sales promotion, which refers to short-term incentives promoting sales of products or services, plays a prominent role. Although there are various types of sales promotions, such as price reduction, buy-x-get-y-free, and trade-in program, the common purpose is to induce the purchase of customers by offering benefits. This successful strategy has caught the attention of researchers, including operations management and supply chain management. Thus, various studies have been conducted to examine strategies for ongoing operations and to demonstrate the effects of the sales promotion, which are based on the strategic level. However, research at the tactical or operational level has been conducted insufficiently. This dissertation examines the inventory models considering (i) markdown sale, (ii) buy one get one free (BOGO), and (iii) trade-in program. First, the newsvendor model is considered. By introducing the decision variable, which represents the start time of markdown sale, the retailer can obtain the optimal combination of the start time of a markdown sale and an order quantity. Under certain conditions in a decentralized system, however, the start time of a markdown sale where the retailer obtains the highest profit is the least profitable for the manufacturer. To avoid irrational ordering behavior by a retailer against a manufacturer, a revenue-sharing contract is proposed. Second, the mobile application, ``My Own Refrigerator'', is considered in the inventory model. It enables customers to store BOGO products in their virtual storage for later use. That is, customers can drop by the store to pick up the extra freebies in the future. The promotion involves a high degree of uncertainty regarding the revisiting date because customers who buy the product do not need to take both products on the day of purchase. To deal with this uncertainty, we propose a robust multiperiod inventory model by addressing the approximation of a multistage stochastic optimization model. Third, the trade-in program is considered. It is one of the sales promotions that companies collect used old-generation products from customers and provide them with new-generation products at a discount price. It also helps to acquire the additional products which are required for the refurbishment service. A multiperiod stochastic inventory model based on the closed-loop supply chain system is proposed by incorporating the trade-in program and refurbishment service simultaneously. The stochastic optimization model is approximated to the robust counterpart, which features a deterministic second-order cone program.시장의 세계화에 따른 기업 간의 경쟁이 가속화됨에 따라, 단기 인센티브를 통해 고객의 제품 또는 서비스 구매를 유도하는 판매촉진의 역할이 중요해졌다. 가격 인하, 행사상품 증정, 트레이드인프로그램과 같은 다양한 유형의 판매촉진 전략이 존재하지만, 공통된 주요 목적은 기업이 고객에게 혜택을 제공하여 고객의 수요를 증대시키는 것이다. 판매촉진의 성공적인 전략은 경영과학 또는 공급망관리 분야를 포함한 관련 학계의 관심을 이끌었다. 지속적인 운영을 위한 전략을 검토하고 전략적 수준 계획을 기반으로 하는 판매 촉진의 효과를 입증하기 위한 다양한 연구가 수행되었습니다. 하지만 운영 수준의 소매업체 입장에서의 연구는 미흡한 실정이다. 본 논문에서는 (i) 마크 다운 (ii) buy one get one free (BOGO), 및 (iii) 트레이드인프로그램을 고려한 재고관리모형을 다룬다. 먼저, 신문가판원 모형에 마크 다운 시작 시점을 나타내는 결정 변수를 도입하여 최적의 마크 다운 시작 시점과 주문량의 조합을 제공하는 모형을 제안한다. 분산 시스템의 특정 조건에서는 소매업자가 가장 높은 이익을 얻는 시점이 제조업자에게 낮은 수익성을 야기할 수 있다. 따라서 본 연구는 제조업자에 대한 소매업자의 비합리적 주문을 막기 위한 이익분배계약을 제안한다. 이익분배계약을 통한 중앙집권화 시스템은 분산 시스템에서 얻은 이익에 비해 소매업자와 제조업자의 이익을 향상시킴을 수치실험을 통해 확인하였다. 둘째, 모바일 어플리케이션 ``나만의 냉장고''를 고려한 재고모형을 고려한다. 이 앱을 통해 BOGO 행사제품을 구매한 고객은 증정품을 구매 당일 날 가져가지 않고 미래에 재방문하여 수령할 수 있는 혜택을 받는다. 하지만 소매업자 입장에서는 고객이 증정품을 언제 수령해 갈 지에 대한 불확실성이 존재하며 이는 기존의 재고관리 운영방식에는 한계점이 있음을 시사한다. 본 연구에서는 고객의 재방문에 대한 불확실성을 고려한 복수기간 추계계획 재고모형을 수립하며 이를 효율적으로 계산하기 위한 강건최적화 모형으로 근사화하였다. 셋째, 리퍼서비스와 트레이드인프로그램을 고려한 폐회로 공급망 시스템 기반의 복수기간 재고관리모형을 제안한다. 신세대 제품, 리퍼서비스 및 트레이드인프로그램에 대한 세 가지 유형의 불확실한 수요에 대한 상관관계를 반영함에 따라 복수기간 추계계획 재고모형이 수립된다. 복수기간 추계계획 재고모형의 계산이 어렵다는 한계를 극복하고자 강건최적화 모형으로 근사화하였다.Chapter 1 Introduction 1 1.1 Sales promotion 1 1.2 Inventory management 3 1.3 Research motivations 6 1.4 Research contents and contributions 8 1.5 Outline of the dissertation 10 Chapter 2 Optimal Start Time of a Markdown Sale Under a Two-Echelon Inventory System 11 2.1 Introduction and literature review 11 2.2 Problem description 17 2.3 Analysis of the decentralized system 21 2.3.1 Newsvendor model for a retailer 21 2.3.2 Solution procedure for an optimal combination of the start time of the markdown sale and the order quantity 25 2.3.3 Profi t function of a manufacturer 25 2.3.4 Numerical experiments of the decentralized system 27 2.4 Analysis of a centralized system 35 2.4.1 Revenue-sharing contract 35 2.4.2 Numerical experiments of the centralized system 38 2.5 Summary 40 2.5.1 Managerial insights 41 Chapter 3 Robust Multiperiod Inventory Model with a New Type of Buy One Get One Promotion: "My Own Refrigerator" 43 3.1 Introduction and literature review 43 3.2 Problem description 51 3.2.1 Demand modeling 52 3.2.2 Sequences of the ordering decision 54 3.3 Mathematical formulation of the IMMOR 56 3.3.1 Mathematical formulation of the IMMOR under the deterministic demand 58 3.3.2 Mathematical formulation of the IMMOR under the stochastic demand 58 3.3.3 Distributionally robust optimization approach for the IMMOR 60 3.4 Computational experiments 76 3.4.1 Experiment 1: tractability of the RIMMOR 77 3.4.2 Experiment 2: robustness of the RIMMOR 78 3.4.3 Experiment 3: e ect of duration of the expiry date under the different customers' revisiting propensities 78 3.5 Summary 83 3.5.1 Managerial insights 83 Chapter 4 Robust Multiperiod Inventory Model Considering Refurbishment Service and Trade-in Program 85 4.1 Introduction 85 4.2 Literature review 91 4.2.1 Effects of the trade-in program and strategic-level decisions for the trade-in program 91 4.2.2 Inventory or lot-sizing model in a closed-loop supply chain system 94 4.2.3 Distinctive features of this research 97 4.3 Problem description 100 4.3.1 Demand modeling 103 4.3.2 Decision of the inventory manager 105 4.4 Mathematical formulation 108 4.4.1 Mathematical formulation of the IMRSTIP under the deterministic demand model 108 4.4.2 Mathematical formulation of the IMRSTIP under the stochastic demand model 110 4.4.3 Distributionally robust optimization approach for the IMRSTIP 111 4.5 Computational experiments 125 4.5.1 Demand process 125 4.5.2 Experiment 1: tractability of the RIMRSTIP 128 4.5.3 Experiment 2: approximation error from the expected value given perfect information 129 4.5.4 Experiment 3: protection against realized uncertain factors 130 4.5.5 Experiment 4: di erences between modeling demands from VARMA and ARMA 131 4.5.6 Experiments 5 and 6: comparisons of backlogged refurbishment service with or without trade-in program 133 4.6 Summary 136 Chapter 5 Conclusions 138 5.1 Summary 138 5.2 Future research 140 Bibliography 142 Chapter A 160 A.1 160 A.2 163 A.3 163 A.4 164 A.5 165 A.6 166 Chapter B 168 B.1 168 B.2 171 B.3 172 Chapter C 174 C.1 174 C.2 174 국문초록 179Docto

Modeling and optimization of remanufacturing operations of spent products for sustainability

In last century, the world has witnessed a great deal of technological and industrial progress. Branded products manufacturers have been competing in introducing new versions of their products frequently. Retailers and banks have been developing relaxed paying systems to fund the purchase of these new products. Exchanging strategies have been initiated by companies for customers to exchange their old version product for the latest versions. Such exchanging strategies are famous for vehicles, mobiles, and electrical appliances. Hence, a huge amount of unused or spent products are generated every day. Many researchers have been developing different models for dealing with the decisions related to remanufacturing operations. However, there is no decision making system the manufacturers could use for cost / benefit assessment of disassembling and recovering these products that considers the following points: (1) evaluating the value of recovering the whole product versus value associated with recovering its disassembled items , (2) using Multi-Objective Mixed Integer Linear Programming (MILP) to assign spent products and their items to various recovery alternatives considering their received physical conditions, (3) selection of operations for items is not limited by a fixed regular production-hour capacity for each operation, (4) model assumptions, constraints, and formulation that satisfy the three aspects of sustainability, which are economic, social responsibility, and environmental aspects in one step model , (5) considering other vital dimensions which are the quality of recovered products and the minimum batch size for vending recycled materials, (6) utilizing the recycling operation in the optimum way that increases revenue from vending isolated materials. The thesis addresses these points using mathematical modeling and optimization for the remanufacturing operations of spent products. The aim of this study is achieved through modeling the problem using a multi-objective mixed integer linear programming technique with two objective functions considering net profit maximization and total disposal weight minimization. Maximizing the net profit over specified planning periods satisfies the economic aspect of sustainability. Minimizing the total weight at all items assigned to disposal over specified planning periods satisfies the environmental aspect of sustainability. Initiating fair refunding system for spent products satisfies social responsibility aspect of sustainability. The optimum solutions of the model provides: optimal disassembly sequence of items, number of each item assigned to various recovery operations of the remanufacturing unit, specification of the required total regular production hours, total needed number of workers, and specification of the number of workers hired and fired. For verifying the proposed model and its LINGO code, the data of a simplified version of the trailer case study was used to display the model and tracking the displayed model to assure that the generated code exactly matches the model formulation, and to discover and correct any logical error. Then, the model was run several times to assure the accuracy of the model and to test the functionality of all the model mathematical equations. Its target was to assure that the integration of the model constraints exactly matched the logic of solving the problem, and the mathematical equation succeeded in expressing the model goals. A case study that involves a numerical real- life critical problem in Egypt is solved considering only the first objective function, which is targeting feasible solutions for the collected trailers that are prohibited to move on the Egyptian roads. The results show that the remanufacturing of semi-trailers from the collected trailers is the most profitable solution for the good-condition trailers, while applying the cannibalization operation on the bad conditions trailers is the most profitable solution for the case. The remanufacture unit would make a net profit of L.E 8,878,800 for applying this solution at the end of the three planning periods. In case the remanufacture unit decided to restrict its recovery activities to the good condition trailers, the net profit of scenario 2 is L.E 20,499,100 at the end of the three planning periods, which is associated with an increase of L.E 11,620,300 in profit compared to recovering different conditions trailers. A professional sensitivity analysis is implemented using the factorial design to accurately decide the significant input parameters that impact the net profit and total disposal weight at the end of the three planning periods for the trailers numerical problem. This factorial sensitivity analysis is designed to test 3 factors for 5 levels. Therefore, 53=125 runs are conducted of all possible combination of these factors (input parameters), and the determination of output responses corresponding to each combination. Hence, the significant input parameters that impact the decisions were concluded. The input parameters that were selected are: selling prices, refund costs, and direct labor processing costs. The output responses that were selected are the net profit and the total disposal weight. It was discovered that changing the selling prices of the output products from the recovery operations which are refurbishing, repairing, remanufacturing, and cannibalization, and the selling prices of the recycled materials has the most influential impact on the net profit , and has the only significant impact on the total disposal weight at the end of the three planning periods. The refund costs paid to the end users for compensating them of getting their products is the second significant factor on the net profit at the end of the three planning periods. Hence, it is crucial to specify these selling prices and refund costs wisely. Two approaches are used to solve the multiple objectives of the modified trailer case study, and to create a set of non-dominating solutions for the referred case which are: Minimax weighting method and constrained method. The most profitable and worst environmental non-dominated solution happened when the referred case was solved using the constrained method at bounding the disposal to 14870.3 kg, where the net profit value reaches its maximum of L.E 8,183,012, when the total weight of the items assigned to disposal reaches its peak of 14835.3 kg. This first best environmental non-dominating solution happened when the case was solved using the constrained method at bounding the disposal to 0 kg, where the net profit value reaches its minimum of L.E 7, 425,400. Solving the referred case using Minimax weighting methods is resulted in balancing solution of two competing objectives. The generated set of non-dominated solutions demonstrated the multi-objective nature of the proposed model