TY - GEN
T1 - A Markov chain model to maximize revenue by varying refurbished product upgrade levels
AU - Behdad, Sara
AU - Thurston, Deborah
PY - 2011
Y1 - 2011
N2 - Refurbishing companies receive used products with varying levels of quality. One challenge facing the remanufacturer is the extent to which upgrading should be conducted. An analytical approach is proposed to evaluate the product recovery system with stochastic variability of the quality of the components/parts returned to the remanufacturing environment. The decision process is formulated via a discrete time Markov chain model. Then, a linear program approach is applied to solve the model to determine up to which level a returned product should be upgraded. The effects of different policies (the level of upgrade) on the total expected value are studied and the optimal decision which maximizes expected average revenue is determined. An example of a copy machine is used to illustrate an application of the model. Finally, the results of the model are further investigated applying a systems dynamics approach to determine the effects of the suggested upgrade strategy on the amount of reusable inventory.
AB - Refurbishing companies receive used products with varying levels of quality. One challenge facing the remanufacturer is the extent to which upgrading should be conducted. An analytical approach is proposed to evaluate the product recovery system with stochastic variability of the quality of the components/parts returned to the remanufacturing environment. The decision process is formulated via a discrete time Markov chain model. Then, a linear program approach is applied to solve the model to determine up to which level a returned product should be upgraded. The effects of different policies (the level of upgrade) on the total expected value are studied and the optimal decision which maximizes expected average revenue is determined. An example of a copy machine is used to illustrate an application of the model. Finally, the results of the model are further investigated applying a systems dynamics approach to determine the effects of the suggested upgrade strategy on the amount of reusable inventory.
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U2 - 10.1115/DETC2011-47879
DO - 10.1115/DETC2011-47879
M3 - Conference contribution
AN - SCOPUS:84863575984
SN - 9780791854860
T3 - Proceedings of the ASME Design Engineering Technical Conference
SP - 951
EP - 959
BT - ASME 2011 International Design Engineering Technical Conferences and Computers and Information in Engineering Conference, IDETC/CIE 2011
T2 - ASME 2011 International Design Engineering Technical Conferences and Computers and Information in Engineering Conference, IDETC/CIE 2011
Y2 - 28 August 2011 through 31 August 2011
ER -