 Coordination between forward and reverse production streams for maximum profitabilityHaolan Liao, Qingyu Zhang, Neng Shen, Yongyou Nie and Lu Li Omega, 2021, vol. 104, issue C Abstract: Although remanufacturing can unlock the added value in used products, the inherent uncertainty in returns can cause a potential imbalance between supply and demand. This study involves the development of an optimisation model, which coordinates the forward and reverse production streams to strike an optimal balance between the uncertain acquisition rate and market demand. We formulate three strategies: (I) a reactive strategy to determine the optimal replenishment for limited output of the remanufactured product, (II) a proactive strategy to implement an optimal remanufacture-up-to policy, and (III) a global optimal strategy to maximise profitability in a closed-loop supply chain. Using different examples, the practical significance and adaptability of each strategy were validated. More importantly, we offer useful managerial implications by revealing that, despite their low processing cost, remanufactured products do not necessarily imply higher cost efficiency. Indeed, it may be more profitable to manufacture new products at a higher cost than remanufacturing. Keywords: Closed-loop supply chain; Remanufacture; Uncertainty; Coordination; Optimisation (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:jomega:v:104:y:2021:i:c:s0305048321000633 Ordering information: This journal article can be ordered from DOI: 10.1016/j.omega.2021.102454 Access Statistics for this article Omega is currently edited by B. Lev More articles in Omega from Elsevier |
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