Single stage closed loop manufacturing-remanufacturing system profitability with different combinations of internal and external return flows: An analytical study

Abstract

External returns could be in the form of warranty, line returns, obsolescence and end of life in a manufacturing system. Internal returns are process rejections in the new product manufacturing line. External return, which is a fraction of the new product manufactured, is acquired from customers/third parties and processed in reverse supply chain repair centre only whereas internal returns could be repaired either in the manufacturing line or remanufacturing line. This study deals with joint decisions on pricing, internal and or external returns percentage to maximise profitability in a single stage closed-loop manufacturing-remanufacturing system for different combinations of internal and external returns flows. Results show that a model with zero manufacturing defects gives maximum profit and the one with both internal and external returns processed in the same repairing centre gives the next best solution.