The Resource Benefits Evaluation Model on Remanufacturing Processes of End-of-Life Construction Machinery under the Uncertainty in Recycling Price
Abstract
:Highlights
- Build up a resource benefits evaluation model on the remanufacturing of end-of-life products.
- Five uncertainty factors in remanufacturing process were taken into account in the model.
- The optimal recycling price and profits were obtained with maximization of resource benefits.
- Change regularity of resource benefits and profits were obtained as other factors varied.
- The study aims to provide government and manufacturers with decision support.
- These findings suggest that the uncertainty factors existing in remanufacturing can be controlled within a reasonable range.
1. Introduction
2. Model Establishing
2.1. Problem Description
2.2. Model Establishing
- Case 1:
- When EOL construction machinery can be reused directly, and represent the remanufacturing resource benefits and the profits of remanufacturer.
- Case 2:
- When EOL construction machinery cannot be reused directly while its crucial components can be reused after repairing, and denote the remanufacturing resource benefits and the profits of remanufacturer.
- Case 3:
- Neither the product nor its crucial components can be remanufactured, and represent the remanufacturing resource benefits and the profits of remanufacturer. This is reasonable in practice. When recycling EOL products, the remanufacturer usually set certain requirements and only products above the condition threshold are recycled or remanufactured. The rates of these three cases are shown as Figure 3.
3. Model Solving
4. Impact Analysis of the Uncertainty Factors
4.1. Analysis of the Uncertainty Factors Associated with Customer Demand
4.2. Analysis of the Quality Fluctuation Coefficient
4.3. Analysis of the Direct Reusing Rate of EOL Product and Its Components
5. Analysis of Numerical Examples
5.1. Example Analysis of the Recycling Price
5.2. Example Analysis of the Recycling Price
5.3. Example Analysis of the Direct Reusing Rate of EOL Product and Its Components
6. Conclusions
- (1)
- If the condition whether the demands in the current period is satisfied or not is independent on previous state, then the ultimate value of customer demands satisfaction of multi-periods converges to a fixed value.
- (2)
- When recycling price is rising, the maximal resource benefits and the profits of remanufacturer are showing a decline trend, and the maximal resource benefits is a convex function of recycling price, the profits of remanufacturer is a concave function of recycling price. The decline rate of remanufacturer profits is higher than that of total resource benefits in remanufacturing.
- (3)
- There is a recycling price to make the resource benefits and the profits of remanufacturer and the value of recycling price is dependent upon the rate of the direct reusing of EOL construction machinery, the rate of the direct reusing of its crucial component and quality fluctuation coefficient.
- (4)
- As the rise of the quality fluctuation coefficient, the profits of remanufacturer, resource benefits and the recycling price are decreasing gradually, furthermore, the decline rate of total resource benefits in remanufacturing is much higher than the recycling price and the profit of remanufacturer. However, when the quality fluctuation coefficient is approaching 1, the values of the profits of remanufacturer, the maximal resource benefits and recycling price grade into constants. Meanwhile, the optimal value of the quality fluctuation coefficient, which can make the resource benefit reach its maximum value, is related to the direct reusing rate of EOL construction machinery and the reusing rate after repairing of the crucial components. In addition, the quality fluctuation coefficient is also influenced by the value of profits of unit EOL construction machinery product and the price-elasticity index: the larger profits of unit EOL construction machinery product and the price-elasticity index are, the smaller the value of the quality fluctuation coefficient will be.
- (1)
- When EOL products are remanufactured by the recycling price under the maximum resources benefits, the profits of remanufacturer will decrease to some extent. Therefore, while regulating the price in market, the government should also offer remanufacturer appropriate subsidies to arouse their enthusiasm.
- (2)
- The model analysis indicates that the demand and acceptance of customers to remanufactured products present a positive correlation to resources benefits. Therefore, enterprises are required to take appropriate marketing strategy (such as advertising, public image) for improving the customer acceptance of remanufacturing products.
- (3)
- The recycling price can be determined by remanufacturer according to the actual value of quality fluctuation coefficient; conversely, it is also feasible to choose EOL products of better quality from recycling merchants in light of the actual recycling price.
- (4)
- The expression of quality fluctuation coefficient shows that the smaller the value of the quality fluctuation coefficient is, the larger the profits of remanufacturer and the price-elasticity index will be. Moreover, the value of quality fluctuation coefficient directly decided by the direct reusing rate of EOL construction machinery and its components, so when recycling the EOL construction products, remanufacturers should choose those products that their quality is comparatively low but the parts of them can be reused directly, which can ensure not only low recycling price but also larger quantity of reusable parts to increase the remanufacturing profits.
- (5)
- Through the analysis on uncertain parameters in this model, they can also make these uncertain factors controlled in a reasonable range, in order to coordinate between profits and resource benefits, and promote healthy development of the whole remanufacturing industry. The details of how the parameters affect the conclusions of the model and how they affect optimality and managerial decisions are shown in Appendix E.
Acknowledgments
Author Contributions
Conflicts of Interest
Appendix A. Solving Process of Objective Functions
Appendix B. Solving Process of the Uncertainty Factors Associated with Customer Demand
Appendix C. Solving Process of the Quality Fluctuation Coefficient
Appendix D. Solving Process of the Direct Reusing Rate of EOL Product and Its Components
Appendix D.1. Impact that , and Have on The Optimal Values
Appendix D.2. Impact of on , and
Appendix E. The Effects by Parameters on Objective Functions and Managerial Decisions
Parameters | Abbreviations | Change regularity | Managerial decisions |
---|---|---|---|
the quality fluctuation coefficient | The smaller the value of the quality fluctuation coefficient is, the larger the profit of remanufacturer and the price-elasticity index will be | When recycling the EOL construction products, remanufacturers should choose those products that their quality is comparatively low but the parts of them can be reused directly, which can ensure not only low recycling price but also larger quantity of reusable parts to increase the remanufacturing profit. | |
recycling price | When EOL products are remanufactured by the recycling price under the maximum resources benefits, the profit of remanufacturer will decrease to some extent | While regulating the price in market, the government should also offer remanufacturer appropriate subsidies to arouse their enthusiasm | |
the demand coefficient | The demand and acceptance of customers to remanufactured products present a positive correlation to resources benefits | Enterprises are required to take appropriate marketing strategy (such as advertising, public image) for improving the customer acceptance of remanufacturing products. | |
the fill rate of customer demand | The fill rate of customer demand | Remanufacturers should meet customer needs as much as possible. |
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Parameters | Abbreviations | Definitions |
---|---|---|
X | The quantity of demands | The quantity of demands for new remanufactured products |
Y | The quantity of acquisition | The quantity of returned EOL products |
Case 1 | When EOL construction machinery can be reused directly | |
Case 2 | Not in Case 1, but its crucial components can be reused in remanufacturing after repairing | |
Case 3 | Neither the product nor its crucial components can be remanufactured(not in Case 1 or Case 2) | |
Recycling price | Unit recycling price of EOL construction machinery | |
Processing costs | Processing costs(cleaning, testing, etc.) of EOL construction machinery in case i(i = 1,2,3) | |
Unit processing costs | Unit processing costs(cleaning, testing, etc.) of EOL construction machinery in case i(i = 1,2,3) | |
Unit disposal costs | Disposal costs of unit EOL product | |
Costs of uncertainty | Cost of uncertainty caused by EOL products quality | |
, | Left/Right end point | Left/Right end point of the interval of the uncertainty costs |
The demand coefficient | The customer demand for remanufacturing products () | |
Demand satisfaction coefficient | The relationship between customers’ demands and the quantity of EOL products | |
Direct reusing rate of product in case 1 | The direct reusing rate of EOL construction machinery in case 1 () | |
Direct reusing rate of components in case 2 | The reusing rate after repairing of the crucial components in case 2 () | |
The rate of the case does not belong to case1 or case or () | ||
Recycling quality | The quality fluctuation coefficient () | |
Recognition coefficient | The recognition coefficient of new remanufactured products by customers | |
Resource net benefits | The overall resource benefits when the demand of customers are satisfied in case i(i = 1,2,3) | |
Unit net resource benefits | Unit resource benefits when the demand of customers are satisfied in case i(i = 1,2,3) | |
Net profits of reman | The profits of remanufacturers when the demand of customers are satisfied in case i(i = 1,2,3) | |
Unit net profits of reman | Profits of unit EOL item construction machinery in case i(i = 1,2,3), | |
Unit profits of reman | Revenue of unit EOL item construction machinery in case i(i = 1,2,3) |
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Deng, Q.-w.; Liao, H.-l.; Xu, B.-w.; Liu, X.-h. The Resource Benefits Evaluation Model on Remanufacturing Processes of End-of-Life Construction Machinery under the Uncertainty in Recycling Price. Sustainability 2017, 9, 256. https://doi.org/10.3390/su9020256
Deng Q-w, Liao H-l, Xu B-w, Liu X-h. The Resource Benefits Evaluation Model on Remanufacturing Processes of End-of-Life Construction Machinery under the Uncertainty in Recycling Price. Sustainability. 2017; 9(2):256. https://doi.org/10.3390/su9020256
Chicago/Turabian StyleDeng, Qian-wang, Hao-lan Liao, Bo-wen Xu, and Xia-hui Liu. 2017. "The Resource Benefits Evaluation Model on Remanufacturing Processes of End-of-Life Construction Machinery under the Uncertainty in Recycling Price" Sustainability 9, no. 2: 256. https://doi.org/10.3390/su9020256