OPTIMAL INBOUND/OUTBOUND PRICING MODEL FOR REMANUFACTURING IN A CLOSED-LOOP SUPPLY CHAIN

Authors

  • Samuel Reong Department of Industrial and Systems Engineering, Chung Yuan Christian University Taiwan
  • Jen-Ming Chen Institute of Industrial Management, National Central University Taiwan
  • Jonas Chao-Pen Yu Department of Distribution Management, Takming University of Science and Technology Taiwan
  • Yu-Lin Hsiao Department of Industrial and Systems Engineering, Chung Yuan Christian University Taiwan
  • Hui-Ming Wee Department of Industrial and Systems Engineering, Chung Yuan Christian University Taiwan

DOI:

https://doi.org/10.23055/ijietap.2022.29.6.8309

Abstract

The paper presents a model for optimizing inbound and outbound pricing for closed-loop supply chains that remanufacture reusable products. Remanufacturers create reusable products from returned used products and sell the products “as new” to manufacturers or consumers. By implementing a return subsidy, remanufacturers can encourage the consumer to return used products. Demand for the as-new components often depends on the selling price and inventory. The available inventory increases as the subsidy increases and as the price decreases. Our model can determine the optimal subsidy and selling price for used and remanufactured products, respectively. Our model uses the Karush–Kuhn–Tucker conditions to solve its nonlinear problem. Sensitivity analysis reveals how different parameters affect profit under model-optimized conditions.

Author Biographies

Jonas Chao-Pen Yu, Department of Distribution Management, Takming University of Science and Technology Taiwan

Jonas C.P. Yu gains his PhD in Institution of Industrial Management at National Central University in 2006 and his MSc degree from Chung Yuan Christian University in 1995. After a long career in several international firms, he has been a Professor of Distribution Management at Takming University of Science and Technology, and Chung Yuan Christian University. His research interests are production & material control, inventory and supply chain management, optimization problems, and pricing and yield management.

Hui-Ming Wee, Department of Industrial and Systems Engineering, Chung Yuan Christian University Taiwan

correspondence author

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Published

2022-12-13

How to Cite

Reong, S., Chen, J.-M., Yu, J. C.-P., Hsiao, Y.-L., & Wee, H.-M. (2022). OPTIMAL INBOUND/OUTBOUND PRICING MODEL FOR REMANUFACTURING IN A CLOSED-LOOP SUPPLY CHAIN. International Journal of Industrial Engineering: Theory, Applications and Practice, 29(6). https://doi.org/10.23055/ijietap.2022.29.6.8309

Issue

Vol. 29 No. 6 (2022)

Section

Operations Research

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