Pricing end-of-life components
Original published in the Proceedings of the SPIE International Conference on Environmentally Conscious Manufacturing V, Boston, Massachusetts, pp. 146-154, October 23-24, 2005
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.
Surendra M. Gupta, Srikanth Vadde, and Sagar V. Kamarthi. "Pricing end-of-life components" (2005).
Available at: http://works.bepress.com/skamarthi/7