Gu Qiaolun, Ji Jianhua and Gao Tiegang
The purpose of this paper is to present the collecting price decisions of used products in reverse supply chains based on the following cases: manufacturer for collecting and…
Abstract
Purpose
The purpose of this paper is to present the collecting price decisions of used products in reverse supply chains based on the following cases: manufacturer for collecting and processing, third party for collecting and manufacturer for processing, retailer for collecting and manufacture for processing, and third party for collecting and processing.
Design/methodology/approach
The paper considers a recycling channel whereby a manufacturer collects and processes the used products or delegates collecting (or processing) to the retailer or a third party; characterizes the steps of processing a returned used product; gives a collection function of used products which is an increasing function of the collecting price, since the quantity of returned used products is affected by the end customer's willingness and the end customer's willingness is affected by the collecting price. The optimal results were obtained by game theory.
Findings
By investigating the pricing decisions for different cases, the manufacturer prefers to collect the used products rather than delegate to others if manufacturer for processing, and a third party joining the reverse supply chains hopes to collaborate more deeply, not only collecting but also processing the used products.
Research limitations/implications
The main implication is that the reusing ratio of the returned used products and the remanufacturing ratio of the key parts have impacts on the optimal pricing decisions of reverse supply chains.
Practical implications
The paper describes a very useful method for managers to make collecting price decisions for reverse supply chains.
Originality/value
The paper provides the optimal results of collecting price decisions. The paper contributes to the reverse supply chains researches and managers who are responsible for the reverse supply chains.
Details
Keywords
Mohsen Rajabzadeh, Seyed Meysam Mousavi and Farzad Azimi
This paper investigates a problem in a reverse logistics (RLs) network to decide whether to dispose of unsold goods in primary stores or re-commercialize them in outlet centers…
Abstract
Purpose
This paper investigates a problem in a reverse logistics (RLs) network to decide whether to dispose of unsold goods in primary stores or re-commercialize them in outlet centers. By deducting the costs associated with each policy from its revenue, this study aims to maximize the profit from managing unsold goods.
Design/methodology/approach
A new mixed-integer linear programming model has been developed to address the problem, which considers the selling prices of products in primary and secondary stores and the costs of transportation, cross-docking and returning unwanted items. As a result of uncertain nature of the cost and time parameters, gray numbers are used to deal with it. In addition, an innovative uncertain solution approach for gray programming problems is presented that considers objective function satisfaction level as an indicator of optimism.
Findings
According to the results, higher costs, including transportation, cross-docking and return costs, make sending goods to outlet centers unprofitable and more goods are disposed of in primary stores. Prices in primary and secondary stores heavily influence the number of discarded goods. Higher prices in primary stores result in more disposed of goods, while higher prices in secondary stores result in fewer. As a result of the proposed method, the objective function satisfaction level can be viewed as a measure of optimism.
Originality/value
An integral contribution of this study is developing a new mixed-integer linear programming model for selecting the appropriate goods for re-commercialization and choosing the best outlet center based on the products' price and total profit. Another novelty of the proposed model is considering the matching percentage of boxes with secondary stores’ desired product lists and the probability of returning goods due to non-compliance with delivery dates. Moreover, a new uncertain solution approach is developed to solve mathematical programming problems with gray parameters.