Models for Retail Pricing and Customer Return Incentive for Remanufacturing a Product

Used products can often be collected via customer returns by retailers in supply chains and remanufactured by producers to bring them back into “as-new” condition for resale. In this paper, mathematical models are developed for determining optimal decisions involving order quantity, retail pricing and reimbursement to customers for returns. These decisions are made in an integrated manner for a single manufacturer and a single retailer dealing with a single recoverable item. Numerical example is shown. The study focuses on the sensitivity analysis to explore the relationship between the parameters and the decision variables.