Title: Optimal pricing and disposal decisions for product recovery facilities under a single portfolio

Authors: Srikanth Vadde; Abe Zeid; Sagar Kamarthi

Addresses: Revenue Analytics Inc., 3100 Cumberland Blvd., Suite 1000, Atlanta, GA 30339, USA ' Department of Mechanical and Industrial Engineering, Northeastern University 360 Huntington Avenue, 334 Snell Engg. Center, Boston, MA 02115, USA ' Department of Mechanical and Industrial Engineering, Northeastern University 360 Huntington Avenue, 334 Snell Engg. Center, Boston, MA 02115, USA

Abstract: This work presents an analytical model that can help decision makers determine the optimal price and disposal quantity for reusable and recyclable components under a single portfolio, when product recovery facilities (PRFs) proactively procure end-of-life products when the passively product returns are insufficient to satisfy the demand for reusable and recyclable components. The modes is built on the assumption that the demand for remanufactured components, which are categorised as like new, good, and acceptable, is governed by the price, obsolescence of components, customer willingness to pay, and remaining life of components. The model is verified by running it on a numerical example in which a PRF processes one particular configuration of personal computer. Even though the model gives numerical values for optimal prices, disposal quantities, and inventory levels, the emphasis is placed on verifying if the trends follow what are generally expected by experts.

Keywords: pricing; optimal price; disposal quantity; reuse; recycling; reusable components; recyclable components; proactive procurement; end-of-life products; EoL products; inventory management; remanufacturing; product recovery; modelling.

DOI: 10.1504/IJCENT.2014.066321

International Journal of Collaborative Enterprise, 2014 Vol.4 No.3, pp.160 - 187

Received: 04 Dec 2012
Accepted: 09 Oct 2013
Published online: 16 Dec 2014 *

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