Product Disposition Decisions on Closed-Loop Supply Chains

  • Gilvan C. Souza
Part of the International Series in Operations Research & Management Science book series (ISOR, volume 174)


In this tutorial chapter we consider the problem of product disposition on a closed-loop supply chain: what should a firm do with a product return? Options include remanufacturing, materials recycling, and dismantling for spare parts. The answer to this question depends on the firm’s objectives and environment. In many industries, remanufacturing is more profitable than dismantling for spare parts, which is more profitable than materials recycling. Recycling may or may not be profitable; and dismantling for spare parts may not be an option if the firm is not an Original Equipment Manufacturer (OEM). There may be uncertainty in demand for remanufactured products and/or the condition of returned products. We review here different decision support models for addressing this problem, and identify the conditions in which one approach is preferred over the other. We conclude with a quick review of the product (return) acquisition problem, which is related to the disposition problem, and that concerns the appropriate number of product returns to acquire in order to support the firm’s closed-loop supply chain operations.


Remanufacturing Product disposition Closed-loop supply chains Production planning 


  1. Denizel M, Ferguson M, Souza GC (2010) Multi-period remanufacturing planning with uncertain quality of inputs. IEEE Trans Eng Manage 57(3):394–404CrossRefGoogle Scholar
  2. Ferguson M, Guide VD Jr, Koca E, Souza GC (2009) The value of quality grading in remanufacturing. Prod Oper Manage 18(3):300–314CrossRefGoogle Scholar
  3. Ferguson M, Fleischmann M, Souza GC (2011) A profit-maximizing approach to disposition decisions for product returns. Decis Sci 42(3):773–798Google Scholar
  4. Fleischmann M, Galbreth M, Tagaras G (2010) Production acquition, grading, and disposition decisions. In Ferguson M, Souza G, (Eds) Closed-loop supply chains: new developments to improve the sustainability of business practices. CRC Press, Boca RatonGoogle Scholar
  5. Galbreth M, Blackburn J (2006) Optimal acquisition and sorting policies for remanufacturing. Prod Oper Manage 15:384–392CrossRefGoogle Scholar
  6. Galbreth M, Blackburn J (2010) Optimal acquisition quantities in remanufacturing with condition uncertainty. Prod Oper Manage 19(1):61–69CrossRefGoogle Scholar
  7. Guide VDR Jr, Teunter R, Van Wassenhove LN (2003) Matching supply and demand to maximize profits from remanufacturing. Manuf Serv Oper Manage 5:303–316CrossRefGoogle Scholar
  8. Hauser W, Lund R (2003) The remanufacturing industry: anatomy of a Giant. Boston University, BostonGoogle Scholar
  9. Inderfurth K, de Kok AG, Flapper SDP (2001) Product recovery in stochastic remanufacturing systems with multiple reuse options. Eur J Oper Res 133:130–152CrossRefGoogle Scholar

Copyright information

© Springer Science+Business Media New York 2012

Authors and Affiliations

  1. 1.Kelley School of BusinessIndiana UniversityBloomingtonUSA

Personalised recommendations