The main objective of a product recovery facility (PRF) is to disassemble end-of-life (EOL) products and sell the reclaimed components for reuse and recovered materials in second-hand markets. Variability in the inflow of EOL products and fluctuation in demand for reusable components contribute to the volatility in inventory levels. To stay profitable the PRFs ought to manage their inventory by regulating the price appropriately to minimize holding costs. This work presents two deterministic pricing models for a PRF bounded by environmental regulations. In the first model, the demand is price dependent and in the second, the demand is both price and time dependent. The models are valid for single component with no inventory replenishment sale during the selling horizon. Numerical examples are presented to illustrate the models.
Pricing models, Second-hand markets, product life cycle, Product and material recovery
Copyright 2005, Society of Photo-Optical Instrumentation Engineers
This paper was published in Proceedings of SPIE (Volume 5997) and is made available as an electronic reprint with permission of SPIE. One print or electronic copy may be made for personal use only. Systematic or multiple reproduction, distribution to multiple locations via electronic or other means, duplication of any material in this paper for a fee or for commercial purposes, or modification of the content of the paper are prohibited.
Society of Photo-Optical Instrumentation Engineers
Gupta, Surendra M.; Vadde, Srikanth; and Kamarthi, Sagar V., "Pricing end-of-life components" (2005). . Paper 95. http://hdl.handle.net/2047/d10009917
Click button above to open, or right-click to save.