Title: On the trade-off between remanufacturing and recycling

Authors: Tharanga Rajapakshe; Milind Dawande; Chelliah Sriskandarajah

Addresses: Warrington School of Business Administration, University of Florida, Gainesville, FL 32611, USA. ' Naveen Jindal School of Management, University of Texas at Dallas, Richardson, TX 75080, USA. ' Mays Business School, Texas A&M University, 4113 TAMU College Station, Texas 77843-4113, USA

Abstract: Motivated by interactions with two reverse-logistics firms, we analyse the trade-off between two product-recovery approaches: recycling and remanufacturing. We consider a manufacturer who produces and markets a product with the objective of maximising profit. A unit of the product consists of two modules: A and B. After recovery, Module A can be recycled to recover its raw material, which can then be used to produce new units of either module. A recovered Module B is remanufactured and can be used in a remanufactured unit. Under this setting, we investigate three options: 1) only recycling of Module A; 2) only remanufacturing of Module B; 3) recycling of Module A and remanufacturing of Module B. We provide a complete theoretical characterisation of the regions of optimality of each option. Useful insights are offered by examining the influence of the fraction of green consumers, the take-back fraction, and product design characteristics.

Keywords: remanufacturing; recycling; extended producer responsibility; EPR; material substitutability; reverse logistics; trade-offs; product recovery; green consumers; take-back; product design; materials substitution.

DOI: 10.1504/IJSOM.2013.050560

International Journal of Services and Operations Management, 2013 Vol.14 No.1, pp.1 - 53

Published online: 31 Jul 2013 *

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