27 research outputs found
A robust optimisation model for hybrid remanufacturing and manufacturing systems under uncertain return quality and market demand
In remanufacturing research, most researchers predominantly emphasised on the recovery of whole product (core) rather than at the component level due to its complexity. In contrast, this paper addresses the challenges to focus on remanufacturing through component recovery, so as to solve production planning problems of hybrid remanufacturing and manufacturing systems. To deal with the uncertainties of quality and quantity of product returns, the processing time of remanufacturing, remanufacturing costs, as well as market demands, a robust optimisation model was developed in this research and a case study was used to evaluate its effectiveness and efficiency. To strengthen this research, a sensitivity analysis of the uncertain parameters and the original equipment manufacturer’s (OEM’s) pricing strategy was also conducted. The research finding shows that the market demand volatility leads to a significant increase in the under fulfilment and a reduction in OEM’s profit. On the other hand, recovery cost reduction, as endogenous cost saving, encourages the OEM to produce more remanufactured products with the increase in market demand. Furthermore, the OEM may risk profit loss if they raise the price of new products, and inversely, they could gain more if the price of remanufactured products is raised
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
Don’t Forget Your Supplier When Remanufacturing
A popular assumption in the current literature on remanufacturing is that the whole new product is produced by an integrated manufacturer, which is inconsistent with most industries. In this paper, we model a decentralised closed-loop supply chain consisting of a key component supplier and a non-integrated manufacturer, and demonstrate that the interaction between these players significantly impacts the economic and environmental implications of remanufacturing. In our model, the non-integrated manufacturer can purchase new components from the supplier to produce new products, and remanufacture used components to produce remanufactured products. Thus, the non-integrated manufacturer is not only a buyer but also a rival to the supplier. In a steady state period, we analyse the performances of an integrated manufacturer and the decentralised supply chain. We find that, although the integrated manufacturer always benefits from remanufacturing, the remanufacturing opportunity may constitute a lose-lose situation to the supplier and the non-integrated manufacturer, making their profits be lower than in an identical supply chain without remanufacturing. In addition, the non-integrated manufacturer may be worse off with a lower remanufacturing cost or a larger return rate of used products due to the interaction with the supplier. We further demonstrate that the government-subsidised remanufacturing in the non-integrated (integrated) manufacturer is detrimental (beneficial) to the environment
Supply Chain and Revenue Management for Online Retailing
This dissertation focuses on optimizing inventory and pricing decisions in the online retail industry. Motivated by the importance of great customer service quality in the online retail marketplace, we investigate service-level-constrained inventory control problems in both static and dynamic settings.
The first essay studies multi-period production planning problems (with or without pricing options) under stochastic demand. A joint service-level constraint is enforced to restrict the joint probability of having backorders in any period. We use the Sample Average Approximation (SAA) approach to reformulate both chance-constrained models as mixed-integer linear programs (MILPs). Via computations of diverse instances, we demonstrate the effectiveness of the SAA approach, analyze the solution feasibility and objective bounds, and conduct sensitivity analysis. The approaches can be generalized to a wide variety of production planning problems.
The second essay investigates the dynamic versions of the service-level-constrained inventory control problems, in which retailers have the flexibility to adjust their inventory policies in each period. We formulate two periodic-review stochastic inventory models (backlogging model and remanufacturing model) via Dynamic Programs (DP), and establish the optimality of generalized base-stock policies. We also propose 2-approximation algorithms for both models, which is computationally more efficient than the brute-force DP. The core concept developed in our algorithms is called the delayed marginal cost, which is proven effective in dealing with service-level-constrained inventory systems.
The third essay is motivated by the exploding use of sales rank information in today's internet-based e-commerce marketplace. The sales rank affects consumers' shopping preference and therefore, is critical for retailers to utilize when making pricing decisions. We study periodic-review dynamic pricing problems in presence of sales rank, in which customers' demand is a function of both prices and sales rank. We propose rank-based pricing models and characterize the structure and monotonicity of optimal pricing policies. Our numerical experiments illustrate the potential of revenue increases when strategic cyclic policy is used.PHDIndustrial & Operations EngineeringUniversity of Michigan, Horace H. Rackham School of Graduate Studieshttps://deepblue.lib.umich.edu/bitstream/2027.42/144159/1/ycjiang_1.pd
Forecast Model for Return Quality in Reverse Logistics Networks
Giving rise to the field of reverse logistics are the governmental legislations mandating used electronics take-backs and sustainable recovery, which often burden manufacturers with the challenge of high implementation costs but no guaranteed profitability. One way to tackle this challenge is to demystify the multi-faceted uncertainties of product returns, namely timing, quantity and quality, that currently inhibit optimal design and operations of reverse logistics networks (RLN). In recognition of the limitations particularly caused by uncertainty of returns’ quality in the strategic, tactical and operational planning of the RLN, this research seeks to develop a forecast model for the prediction of the returns’ quality of future electronics returns. The proposed forecast model comprehensively incorporates three major factors that affect quality decisions which are usage, technological age and remaining economic value of expected product returns to predict its quality grade. While technological age and economic trends can readily be established, the main complexity lies in modeling of usage-dependent reliability distribution of returned electronics. The novelty of the proposed forecast model lies in deducing usage distributions through segmentation of the consumer base by socioeconomic factors such as age, income, educational status and location. These usage distributions are then used to estimate remaining useful life of returned products and their components, the associated repair costs and the subsequent profitability of reprocessing based on economic value in the market. This research develops analytical models of expected return quality based on empirical usage distributions and pricing trends. The analytical models are then applied in Monte Carlo simulations to forecast expected returns’ quality from different regions, including large and small population centers, in Canada
Warranty and Maintainability Analysis for Sensor Embedded Remanufactured Products in Reverse Supply Chain Environment
Remanufactured products are very popular with consumers due to their appeal to offer the latest technology with lower prices compared to brand new products. The quality of a remanufactured product induces hesitation for many consumers, in regards to its efficacy and reliability. One stratagem that remanufacturers could employ to encourage customer security are product warranties. This paper studies and scrutinizes the impact that would be had by offering renewing warranties on remanufactured products. This study was able to determine the optimal costs of warranty for two-dimensional non-renewable warranty offered on remanufactured products using the simulation model and design of experiments
The Viability of the Air Mobility Command Pure Pallet Program for US Army Reparable Retrograde Shipments
Last year, Congress approved 4 billion dollars more than originally was requested by the Bush Administration, for US Army vehicles to be repaired or replaced (commonly referred to as reset) as a result of military operations in Iraq and Afghanistan. A large portion of the repair workload falls upon the Army depots in Anniston and Red River in Texarkana, Texas and must rely on the DOD transportation system for air and surface movement of retrograde cargo deemed serviceable and unserviceable to fill requisitions and backorders for entry into the national supply inventory. Headquarters Air Mobility Command developed an initiative for distribution to the US Central Command to allow supply requisition shipments to accumulate based on customer defined delivery timelines to a single unit destination to eliminate the need of mixed destinations on a single pallet, thereby avoiding intermediate handling and increase in-transit visibility. This research viewed the depot and the item managers as the customers due to the value they collectively add in equipment repairs and how retrograde is directed to meet the needs of the end user. Subject matter experts from Army Materiel Command provided their inputs through a series of focused interviews to calculate their value placed on transportation system and convergence with a cost comparison of the accumulation principles of the AMC pure pallet program. The results indicated that the AMC pure pallet program was not a viable option due to conflicts with customer requirements, high variability in the volume of retrograde generated to successfully utilize this option despite the savings in using consolidated shipments
Essays on Product Acquisition for Value Recovery
This dissertation studies decision problems facing the manufacturer that offers cash incentive to encourage a fraction of its install base to return end-of-use devices. Marketing managers often use such tactics as a promotion tool to motivate sales of new products. Supply chain managers often use such tactics to obtain used products for profitable recovery operations. The first essay, Product Acquisition for Remanufacturing: A Dynamic Analysis, analyzes the performance of buyback and trade-in policies for acquiring products to be remanufactured. A key distinguishing feature of this analysis is the consideration of time dynamics. In particular, both the quantity-condition profile of used products and the market interest in remanufactured products evolve over time, and the manner of evolution is influenced by new product sales. Essay 1 introduces and analyzes a series of models that reflect the dynamics of customer willingness-to-return and willingness-to-pay attitudes, the size and condition of the OEM product install base, the demand for remanufactured product, and the demand for new product. Conventional approaches set trade-in and buyback prices to maximize profits in a single period; however, our analysis show that companies can earn higher profits by adopting a proactive approach. The second essay Final Purchase and End-of-Use Acquisition Decisions in Response to a Component Phase-Out Announcement is motivated by informal talks with supply chain executives from the computer industry. Essay 2 investigates a problem faced by a durable-goods manufacturer of a product that is no longer manufactured but still under warranty. A supplier announces that a component of the product will be phased out and specifies a deadline for the final order. In addition to determining the final order quantity from the supplier, the manufacturer may introduce a trade-in program to generate an alternative supply of the component for the purpose of satisfying warranty claims. We analyze how industry and market characteristics influence the manufactures optimal decisions and profits. The analysis in the second essay lends insight into the determinants of the initial order quantity, the characteristics of a well-designed trade-in program to support component harvesting, and the cost of ignoring a trade-in program for component harvesting. We find that launching a trade-in program and harvesting spare-parts from the returned device is not only a viable response to a supplier\u27s component phase out announcement, under certain conditions, launching a trade-in program is actually profitable
Application of Optimization in Production, Logistics, Inventory, Supply Chain Management and Block Chain
The evolution of industrial development since the 18th century is now experiencing the fourth industrial revolution. The effect of the development has propagated into almost every sector of the industry. From inventory to the circular economy, the effectiveness of technology has been fruitful for industry. The recent trends in research, with new ideas and methodologies, are included in this book. Several new ideas and business strategies are developed in the area of the supply chain management, logistics, optimization, and forecasting for the improvement of the economy of the society and the environment. The proposed technologies and ideas are either novel or help modify several other new ideas. Different real life problems with different dimensions are discussed in the book so that readers may connect with the recent issues in society and industry. The collection of the articles provides a glimpse into the new research trends in technology, business, and the environment