Browsing by Subject "Closed-loop supply chains"

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Diffusion control in closed-loop supply chains: Successive product generations
(Elsevier BV, 2023-12-10) Bayrak, B.; Guray, B.; Uzunlar, N.; Nadar, Emre
We consider a durable-good producer who optimizes its sales decisions for two successive product generations with refurbishing and recycling potential. Customer arrivals follow a multi-generation diffusion process that takes into account the word-of-mouth feedback spread within each customer population of successive generations as well as the substitution effect among these generations. We investigate whether the producer can profit from partially satisfying the new-generation demand to slow down the product diffusion and improve the refurbishing and recycling volumes in the long run. We derive conditions for optimality of this partial-fulfillment policy. In fast-clockspeed industries, if the producer enters the refurbishing market for both generations, the partial-fulfillment policy is optimal if (i) the profit margin ratio of the early-generation product to the new-generation product is high enough, (ii) the profit margin ratio of the refurbished item to the new item is large enough for the new-generation product, and (iii) the fraction of customers willing to buy the refurbished item is only modestly large for each generation. If the producer uses the recycled content obtained from early-generation returns in new-generation production, the partial-fulfillment policy is optimal if (i) the number of early-generation end-of-life returns and the amount of recyclable material from each such return are large and (ii) the number of customers initially attracted by the early-generation product is high. We also characterize the critical time period beyond which initiating the partial-fulfillment policy provides no improvement in the refurbishing and recycling volumes for the new-generation product.
Open Access
Diffusion control in closed-loop supply chains: successive product generations with remanufacturing potential
(2023-06) Güray, Büşra
We consider a durable-good producer who aims to jointly optimize its sales decisions for two successive product generations that are remanufacturable. The customer arrivals are governed by the generalized Norton-Bass diffusion process over a finite selling horizon. The remanufactured-item sales are constrained by the available end-of-use returns in each time period for each product generation. We investigate whether the producer can profit from partially satisfying the second-generation product demand to smooth out the second-generation diffusion curve and increase the total remanufactured-item sales in the long run. We show that the partial-fulfillment policy is optimal for fast-clockspeed products if (i) the profit margin ratio of the remanufactured item to the new item is large enough for the second-generation product, (ii) the profit margin ratio of the first-generation new item to the second-generation new item is high enough, (iii) the fraction of customers who are willing to buy the remanufactured item is only moderately large for each product generation, and (iv) the number of customers who are initially attracted by the first-generation product and willing to buy the remanufactured item is not too large. We also characterize the environmentally critical time period beyond which the optimal initiation of partial demand fulfillment leads to no improvement in the total remanufacturing volume for the second-generation product.
Open Access
Diffusion control of successive product generations with recycling potential
(2021-06) Uzunlar, Nilsu
In this thesis, we study the sales planning problem of a producer who sells two successive generations of a durable good with recycling potential. Certain ex-pensive materials can be recovered from consumer returns of the early-generation product and can be used in manufacturing of the new-generation product. De-mands for the successive product generations arrive as a generalized Norton-Bass diﬀusion process and the recycling operations for the new-generation product are constrained by the early-generation product returns. In this setting, we inves-tigate whether slowing down the new-generation product diﬀusion by partially satisfying its demand might be proﬁtable for the producer who aims to maximize its total proﬁt from the entire product line. Such manipulation of the diﬀusion process may improve the use of recycled content in production as well as the cross-generation repeat purchases over a suﬃciently long selling horizon. The optimal sales plan involves partial demand fulﬁllment when the diﬀusion curves of the early- and new-generation products overlap substantially and the release of the new-generation product only moderately increases the customer base. How-ever, partial demand fulﬁllment is less likely to be desirable if the product returns mostly arrive through trade-up programs rather than recycling programs such as free mail-back and physical drop-oﬀ options oﬀered to consumers. Finally, partial demand fulﬁllment, if initiated too late, may escalate the overall consumption of virgin raw materials, making it environmentally undesirable.
Open Access
New product diffusion in closed-loop supply chains
(2017-02) Kaya, Barış Emre
In this thesis, we develop a dynamic model for sales planning of a manufacturer who sells new and remanufactured versions of a product. Demand arrives over a finite life cycle according to the slightly modified Bass diffusion process. End-ofuse product returns required for remanufacturing are constrained by the earlier sales. In this setting the manufacturer may simultaneously improve its economic and environmental performance by partially satisfying the initial demand. This can indeed occur when innovators contribute more heavily than imitators to the diffusion process, remanufacturing has a significantly large profit margin, or an unmet demand is very likely to be backlogged to be satisfied with a remanufactured product. But a very large backlogging rate may in ate the future demand if the initial sales volume is low, making it difficult to ensure a sufficient returns volume for remanufacturing. The manufacturer thus sells more under a very large backlogging rate, and a poorer environmental performance results. The optimal sales plans also differ across product types: The manufacturer of a search good has the advantage of keeping the future demand intact regardless of the initial sales, compared to the manufacturer of an experience good. Partially satisfying the demand can thus be desirable for search goods under a greater number of imitators, a lower margin from remanufacturing, or a lower backlogging rate. However, if partially satisfying the demand is desirable for both product types, the manufacturer of a search good sells more to enable a sufficient returns volume for the larger future demand.
Open Access
Risk-averse optimization for managing inventory in closed-loop supply chains
(2016-07) Özer, Melis Beren
This thesis examines a closed-loop multi-stage inventory problem with remanufacturing option. A random fraction of used products is returned by consumers to the manufacturer after a certain number of stages. But the manufacturer may or may not collect any returned item. Demand can be satisfied through two channels: manufacturing new products and remanufacturing used products (cores). A control policy specifies the numbers of cores to collect and remanufacture, and the number of new products to manufacture, at each stage. The state space consists of the serviceable product and core inventory levels, and the amounts of future returns. We study this problem from the perspectives of risk-neutral and risk-averse decision-makers, in both cases of lost sales and backordering. We incorporate the dynamic coherent risk measures into our risk-averse problem formulation. We establish that it is always optimal to prefer remanufacturing to manufacturing under a mild condition. Numerical results indicate that a statedependent threshold policy may be optimal for the core inventory. However, such a policy need not be optimal for the serviceable product inventory. We also conduct numerical experiments to evaluate the performance of several heuristics that are computationally less demanding than the optimal policy: a certainty equivalent controller (CEC), a myopic policy (MP), a no-recovery policy (NRP), a full-collection policy (FCP), and a fixed threshold policy (FTP). CEC, MP, and NRP have a distinct computational advantage over FCP and FTP, whereas FCP and FTP significantly outperform all the other heuristics with respect to objective value, in our numerical experiments.
Open Access
Sales planning in closed-loop supply chains: recycling and remanufacturing options for early-generation returns
(2023-08) Bayrak, Büşra
We consider a durable-good producer who optimizes its sales strategy for two successive generations of the same product and is able to remanufacture or recycle the first-generation product returns. The customer arrivals follow a multi-generation diffusion process that takes into account the word-of-mouth feedback spread within each customer population of successive product generations as well as the substitution effect among these product generations. We investigate theeconomic viability of deliberately slowing down the second-generation product diffusion to improve the first-generation remanufactured-item sales and the use of recycled content in the second-generation production in the long run. We provethat such a forward-looking approach is optimal if (i) the diffusion process is fast enough in the absence of any manipulation, (ii) the number of first-generation end-of-life returns and the recyclable-material amount from each such return are high enough, and (iii) the potential customer base of the first-generation product is sufficiently large. We also show that the same forward-looking approach is less likely to be optimal when the used items can only be acquired from the previous buyers of the first-generation product who return their used items to trade up to the second-generation product. We conjecture that our sales strategy has the potential not only to improve the profits in the long run but also to contribute to sustainable production and consumption by helping recover more used items via remanufacturing and recycling options.
Open Access
Tüketici davranışlarının zamanla değiştiği kapalı devre tedarik zincirlerinde satış planı eniyilemesi
(Gazi Üniversitesi , Fen Bilimleri Enstitüsü, 2019) Nadar, Emre
Bu çalışmada, yeni ve yeniden imal edilen olmak üzere iki farklı şekilde satılabilen ürünlerin satış planını eniyileme problemi ele alınmaktadır. Ürün talep eğrisi, literatürde yaygın olarak kullanılan ve gerçek verilerle birçok dayanıklı ürün için geçerliliği onaylanmış Bass yayılım sürecini takip etmektedir. Üretici belirli dönemlerde belirli taleplerin karşılanmasını geciktirerek yayılım sürecini yavaşlatabilmektedir. Satılan ürünlerin bir kısmı belirli bir süre kullanıldıktan sonra üreticiye geri dönerek yeniden imalata hazır hale gelmektedir. Yayılım sürecinin yavaşlatılarak yeniden imal edilen ürün talebinin kullanılmış ürün arzıyla daha etkin bir şekilde eşleştirilmesi üretici açısından daha kazançlı olabilmektedir. Müşterinin ürünün markasına (veya üreticisine) bağlılığı ve yeniden imal edilen ürün talebi zamanla değişebilmektedir. Bu satış planı eniyileme problemini makul ölçekli örneklerde çözebilen bir dinamik programlama algoritması önerilmektedir. Sayısal çalışmalarda bu algoritma kullanılarak en iyi satış politikalarının yayılım süreci ve tüketici davranışı parametrelerine göre değişimi incelenmiştir. Müşterinin markaya bağlılığının veya yeniden imal edilen ürün talebinin zamanla azalmasının, yeniden imalattan daha fazla gelir elde etmek için zamanında karşılanan toplam talep sayısını azalttığı gözlenmiştir.