A closed-loop recycling system with a minimum allowed quality level on returned products

Hark Hwang, Young Dae Ko, Sang Hun Yune and Chang Seong Ko

International Journal of Services and Operations Management, 2009, vol. 5, issue 6, 758-773

Abstract: This paper deals with a closed-loop recycling system in which a stationary demand is satisfied by remanufactured products as well as newly manufactured products. In this system, only those used products that satisfy a minimum allowed quality level are bought back from customers for recycling. Thus the collection rate of used products is expressed as a function of the quality level and the unit bought-back price. It is assumed that the cycle consists of a single remanufacturing run and a single manufacturing run, both in Economic Production Quantity settings. Treating the quality of recycled products as a random variable, we develop a mathematical model with the objective of minimising the production and inventory costs. The decision variables are the length of the cycle, the minimum allowed quality level and the unit bought-back price of used products. To illustrate the validity of the model, sample problems are solved.

Keywords: closed-loop recycling systems; minimum allowed quality levels; bought-back price; remanufacturing; used products; EPQ; economic production quantity; mathematical modelling. (search for similar items in EconPapers)
Date: 2009
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Citations: View citations in EconPapers (4)

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