Case Article—ReCellular Inc: Managing Demand Uncertainty in Closed-Loop Remanufacturing

Akshay Mutha (), Saurabh Bansal () and V. Daniel R. Guide ()
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Akshay Mutha: Grossman School of Business, The University of Vermont, Burlington, Vermont 05405
Saurabh Bansal: Department of Supply Chain & Information Systems, Smeal College of Business, Pennsylvania State University, University Park, Pennsylvania 16802
V. Daniel R. Guide: Department of Supply Chain & Information Systems, Smeal College of Business, Pennsylvania State University, University Park, Pennsylvania 16802

INFORMS Transactions on Education, 2023, vol. 24, issue 1, 8-12

Abstract: The modeling-based case study is useful for two purposes: introduce closed-loop supply chains and highlight and model some of its unique aspects that the traditional newsvendor formulation does not capture. The case focuses on a third-party remanufacturer (3PR) who buys used cellphones in different quality grades in anticipation of demand. Phones in high grade have been used gently—they have a high acquisition cost but low remanufacturing cost. Low-grade phones have been used extensively—they are cheaper to acquire but have a higher remanufacturing cost. Medium-grade phones have intermediate acquisition and remanufacturing costs. The 3PR needs to trade off these two costs and determine which grade(s) of used phones to buy. The 3PR restores all phones to the same like-new standard during remanufacturing. Extensive use of the case in supply chain management courses shows that in the absence of a mathematical model, students systematically deviate from the optimal decisions because of contextual features. Overall, students believed the case was challenging and that it provides a valuable learning experience, both as an exposure to the closed-loop supply chain domain as well as developing models with industry-specific factors.

Keywords: closed-loop supply chains; circular economy; remanufacturing (search for similar items in EconPapers)
Date: 2023
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