Forecasting Product Returns for Remanufacturing Operations

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2012-08-01
Authors
Clottey, Toyin
Clottey, Toyin
Benton, W. C.
Srivastava, Rajesh
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Supply Chain Management
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Supply Chain Management
Abstract

Driven by legislative pressures, an increasing number of manufacturing companies have been implementing comprehensive recycling and remanufacturing programs. The accurate forecasting of product returns is important for procurement decisions, production planning, and inventory and disposal management in such remanufacturing operations. In this study, we consider a manufacturer that also acts as a remanufacturer, and develop a generalized forecasting approach to determine the distribution of the returns of used products, as well as integrate it with an inventory model to enable production planning and control. We compare our forecasting approach to previous models and show that our approach is more consistent with continuous time, provides accurate estimates when the return lags are exponential in nature, and results in fewer units being held in inventory on average. The analysis revealed that these gains in accuracy resulted in the most cost savings when demand volumes for remanufactured products were high compared to the volume of returned products. Such situations require the frequent acquisition of cores to meet demand. The results show that significant cost savings can be achieved by using the proposed approach for sourcing product returns.

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This accepted article is published as Clottey, T., Benton Jr., W.C., Srivastava, R., Forecasting Product Returns for Remanufacturing Operations. Decision Sciences. 2012 43(4);589-614. doi: 10.1111/j.1540-5915.2012.00362.x. Posted with permission.

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