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Price Discount for a Closed-loop Supply Chain Coordination Policy with Remanufacturing and Price Sensitive Demand for Deteriorating Items
Conference
Proceedings of the 2nd International Conference on Operations and Supply Chain Management
Publisher(s)
University of the Thai Chamber of Commerce
Date Issued
2007
Author(s)
Abstract
Many companies show an interest to collect used products to recover residual value because of environmental regulations and consumer pressures. Reverse logistics can lead to better relationships among supply chain partners, more profits through reduced costs, and greater efficiencies and higher remanufacturing rates for used products. Price discount is a significant approach for developing a closed-loop supply chain coordination policy. The joint decision policy characterized by selling prices, production quantity and replenishment schedules is coordinated through price discount. This study analyzes a closed-loop supply chain inventory system with inventory stages in recycles. In addition to traditional forward material flows, the used products are returned to a recovery facility where they can be stored, remanufactured and shipped to retailers for sale. This study investigates a price discount policy for a multi-echelon inventory system with remanufacturing and price sensitive demand for deteriorating items. We derive the optimal price discount policy by considering the integration of the manufacturer and the retailer, and develop a mathematical closed-loop supply chain inventory model with remanufacturing and price dependent demand for deteriorating items. An example of a closed-loop multi-echelon inventory model is used to illustrate the system with different negotiation factors and profit-sharing ratios. Thus, obtaining the greatest benefits for the whole system should be in a cooperative environment. Price discount policy must be incorporated into the supply chain inventory management system.
Subject(s)
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Rights
This work is protected by copyright. Reproduction or distribution of the work in any format is prohibited without written permission of the copyright owner.
Rights Holder(s)
University of the Thai Chamber of Commerce
Bibliographic Citation
S.L. Chung, H.M. Wee, P.C. Yang (2007) Price Discount for a Closed-loop Supply Chain Coordination Policy with Remanufacturing and Price Sensitive Demand for Deteriorating Items.
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