Product Lifecycle Considerations in Closed-Loop Supply Chain Management

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This dissertation examines the impact of product returns on effective supply chain management. Within this area of research, known as Closed-Loop Supply Chain Management, we consider both strategic and tactical level reverse logistics and inventory management problems from the perspective of a firm which must efficiently process returned items. More specifically, we explore the effective integration of forward and reverse logistics systems throughout the product lifecycle and the impact of lifetime buys on repair operations for short lifecycle products. The first part of this dissertation develops three general bidirectional facility location models to deliver products and collect returns in a two-tier supply chain. This research quantifies the value of simultaneously considering forward and reverse product flows when designing an integrated closed-loop logistics network. We develop these models as extensions of the classical uncapacitated fixed charge location problem and present a Lagrangian relaxation-based solution algorithm that is quick and effective. We measure the cost savings opportunities of integrated network design throughout the introductory, maturity, and decline stages of the product lifecycle. In addition, we discuss the resulting network configurations and introduce a new network similarity metric to quantify this analysis. The second part of this dissertation investigates the impact of lifetime buys on warranty repair operations for short lifecycle products. This work is the first to consider the implications of a single procurement opportunity for repair parts, which is common practice in the electronics and telecommunications industries. Using a deterministic continuous time model, we show how fixed repair capability costs, variable repair costs, inventory holding costs, and replacement costs affect a firm's optimal repair and replacement decisions for a single product. We extend these models to examine the role of repair capacity constraints for the single product model and the impact of having shared repair facilities that service two products. Our models are applied to an industry case to gain insights for a U.S. mobile device manufacturer. The third part of this dissertation develops a scenario planning extension of the lifetime buy problem to understand the effects of return rate uncertainty in the inventory planning process. We present two models that address the somewhat competing objectives of minimizing cost and minimizing risk under a discrete set of return rate scenarios. We also explore the tradeoff curve of efficient solutions that are Pareto-optimal in the two objectives. Our analysis empirically shows that solutions to this problem are robust with respect to minimizing cost and risk.

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  • 06/05/2018
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