The effect of active used product acquisition on manufacturing and remanufacturing strategies

Companies can gain a competitive edge by managing closed-loop supply chains efficiently. This requires the joint consideration of forward and reverse logistic processes. The acquisition of used products is an important factor within the closed-loop context. The availability of acquired used cores has a direct effect on the manufacturing-reprocessing disposition strategy. Thus, the acquisition process and the production disposition are highly interrelated. In further consequence, the linked view on an active acquisition process combined with manufacturing-remanufacturing decisions is essential. In this paper, the optimal strategies concerning the acquisition of used cores, manufacturing of new products, and remanufacturing are studied analytically in a two-period model with stochastic, newsvendor-like demands. Given the closed-loop setting, the quantity acquired and remanufactured in the second period is limited to the sales of new products in the first period. Furthermore, a numerical study provides insights into the influence of an active acquisition process on quantities and profit.