An analytical model for reverse automotive production planning and pricing |
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Authors: | Xiuli Qu Julie Ann Stuart Williams |
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Institution: | aNorth Carolina A&T State University, Department of Industrial and Systems Engineering, 1601 E Market Street, Greensboro, NC 27411, United States;bUniversity of West Florida, Pensacola, FL, United States |
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Abstract: | Automotive shredders need a reverse production planning strategy that includes determining at what price to purchase vehicle hulks from different sources. In this paper, we formulate the automotive reverse production planning and pricing problem in a nonlinear programming model, develop an approximate supply function for hulks when adjacent shredders price independently, and compare two hulk pricing strategies in three trends for ferrous metal and hulk prices: constant, increasing and decreasing. The case study results indicate that adjusting purchase price based on hulk composition in coordination with planning for purchasing, storing and processing can increase net revenue by 7–15%. |
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Keywords: | Pricing Reverse production planning Environment Automotive shredding |
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