Inventory model for disassembly systems with price dependent return rate
Abstract
In this paper, we are proposing a new Economic Order Quantity (EOQ) model for return-driven disassembly systems. End-of-life (EoL) products arrive in the system to be disassembled into parts or material fractions that can be sold in different secondary market or disposed of in an environmental conscious way. The returns are considered controllable with respect to a buyback price. The model can determine if the system is profitable by finding an equilibrium between revenues obtained from the components and buyback, disassembly and inventory costs. The properties of the model are analyzed to derive an efficient solution approach to find the optimal return price and the reorder interval. A sensibility analysis performed on an illustrative example shows the effect of the model parameters.