Optimal Pricing and Production Planning Decisions in Reusable Container Systems

Atamer B., Bayındır Z. P. , Bakal İ. S.

16th International Symposium on Inventories, Budapest, Macaristan, 23 - 28 Ağustos 2010, ss.28

  • Basıldığı Şehir: Budapest
  • Basıldığı Ülke: Macaristan
  • Sayfa Sayıları: ss.28


Optimal pricing and production planning decisions in reusable container systems Büsra Atamer, Ismail Bakal, Pelin Bayindir Middle East Technical University, Industrial Engineering Department, Turkey The main objective of the study is to focus on the decision making problems in reusable container systems with stochastic demand. Optimal pricing and production planning decisions in reusable container systems result in more pro!table and environmental-friendly production alternatives for manufacturers and cheaper products for consumers. One typical example of reusable container systems is a beverage production system using re!llable bottles. Customers purchase the products within reusable containers and then may return the container to the producer in consideration of a deposit price. The return amount is neither constant nor deterministic; it depends on both customer demand and the deposit price determined by the producer. Hence, the manufacturer has the opportunity to manipulate the return quantity via the deposit price. Since only a proportion of the containers will be returned throughout the period, the producer also has to decide on the quantity of brand new reusable containers to be purchased. The unit cost of production with a new reusable container is di"erent from the unit cost of re!lling a returned container when collection and set up costs are taken into account. Also, there may be a capacity restriction on the manufacturing and remanufacturing operations. That is, production planning and pricing decisions are to be made simultaneously for a synchronized reusable container system. Our approach utilizes constrained non-linear optimization techniques. The study is completed with the investigation of the model analytically and computationally. Our analytical and computational results show us that, the unit pro!t margins of di"erent production alternatives are not adequate in indicating the most pro!table pricing and production planning option; but an overall view to the reusable container system is required. Keywords: Closed-loop supply chains, Reverse logistics, Reusable containers, Deposit – refund systems