Title: Two-stage capacity design problem in a single-collector-single-remanufacturer system
Authors: Yoolee Son; Taebok Kim
Addresses: Graduate School of Logistics, Incheon National University, Songdo-Dong, Yeonsu-Gu, Incheon, 406-840, Korea ' Graduate School of Logistics, Incheon National University, Songdo-Dong, Yeonsu-Gu, Incheon, 406-840, Korea
Abstract: In this paper, we study a capacity planning problem in a two-stage reverse supply chain, which consists of one collector and one remanufacturer when the used products are stochastically returned. We consider collector's two alternative modes to cope with a stochastic return rate of used products. For each mode, we develop the analytical solution procedure to determine the optimal level of collection and remanufacturing capacity according to the bargaining power of these two actors based on newsvendor model. And then, we conduct a numerical study to examine how these two modes behave and compare the relative effectiveness. Based on numerical analyses, it was observed that the variance of return rate of used product is a very important factor in managing the capacity policy. Additionally, according to collector's capacity mode, the issue who leads a decision-making has also significant effect on deciding two actors' individual profit and system profit.
Keywords: two-stage capacity design; single-collector single remanufacturer system; reverse supply chains; RSC; stochastic return rate; capacity planning; newsvendor model; remanufacturing capacity; reverse logistics; collection level.
International Journal of Procurement Management, 2015 Vol.8 No.3, pp.272 - 302
Received: 24 Jan 2014
Accepted: 15 Feb 2014
Published online: 30 Apr 2015 *