Effect of Inspection Policies and Residual Value of Collected Used Products: A Mathematical Model and Genetic Algorithm for a Closed-Loop Green Manufacturing System

Byung Duk Song and Young Dae Ko
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Byung Duk Song: Department of Hotel and Tourism Management, College of Hospitality and Tourism, Sejong University, Seoul 05006, Korea
Young Dae Ko: Department of Hotel and Tourism Management, College of Hospitality and Tourism, Sejong University, Seoul 05006, Korea

Sustainability, 2017, vol. 9, issue 9, 1-14

Abstract: In the green manufacturing system that pursues the reuse of used products, the residual value of collected used products (CUP) hugely affects a variety of managerial decisions to construct profitable and environmental remanufacturing plans. This paper deals with a closed-loop green manufacturing system for companies which perform both manufacturing with raw materials and remanufacturing with collected used products (CUP). The amount of CUP is assumed as a function of buy-back cost while the quality level of CUP, which means the residual value, follows a known distribution. In addition, the remanufacturing cost can differ according to the quality of the CUP. Moreover, nowadays companies are subject to existing environment-related laws such as Extended Producer Responsibility (EPR). Therefore, a company should collect more used products than its obligatory take-back quota or face fines from the government for not meeting its quota. Through the development of mathematical models, two kinds of inspection policies are examined to validate the efficiency of two different operation processes. To find a managerial solution, a genetic algorithm is proposed and tested with numerical examples.

Keywords: green manufacturing; re-manufacturing; reverse logistics; residual value; minimum quality lever; inspection policy; genetic algorithm (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2017
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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