A multi-period model for managing used product returns

Abstract

During the last decades there has been a consistent need for companies to manufacture ‘green’ products in order to contribute to environmental protection. The utilisation of used products (literally, the extension of their useful life cycle) is an excellent, indirect way for companies to conform to this requirement and, at the same time, increase their profit. In this paper a mixed integer linear programming mathematical model is proposed, which can be used for the optimisation of procurement, remanufacturing, stocking and salvaging decisions. The model is flexible enough to incorporate multiple suppliers, several quality levels of returned products and multiple periods of time. The applicability of the model is demonstrated through the optimisation of alternative scenarios, the optimal solutions of which reveal the potential profitability of used products exploitation.