Approach for improving the life-cycle profit exploding remanufacturing conditions

Abstract

This work presents a mixed-integer nonlinear programming (MINLP) formulation for the multi-period planning of a Closed-Loop Supply Chain (CLSC) with the emphasis placed on remanufacturing conditions. The approach considers the life-cycle of products related to processes industry. It is taken into account that two types of products flow through the CLSC, products with traditional and modular design (TD and MD). While products with traditional design (PTD) uses only new raw materials, products with modular design (PMD) utilizes partially or totally materials that are recovered from discarded products. The manufacturing process connected with the PMD is characterized by improving the manufacturing and material separation. As part of the problem, it must be determined the selling prices, the amount of manufactured products, the return rates of discarded products and the level of materials recovery. Demand functions and customer utility measures for products with traditional and modular design are considered. The objective function is to maximize the total life-cycle profit taking into account the sum of the profits from selling products with traditional and modular designs. The MINLP approach is applied to the planning problem of a firm dedicated to manufactures carpets that wants to produce according to a new modular design where recovered materials must be used. The performance of the model is evaluated solving several case scenarios. The results obtained with the model for the carpet design allow to achieve important practical conclusions, such as the consideration of both designs, traditional and modular, has a positive impact on the total profit and allows the company to have a greater presence in the market.