Impact of product acquisition on manufacturing and remanufacturing strategies

Companies can gain a competitive edge by managing closed-loop supply chains efficiently. This requires the joint consideration of forward and reverse logistic processes. The acquisition of used products is an important factor within the closed-loop context, as the availability of acquired used cores has a direct effect on the manufacturing–remanufacturing disposition strategy. Thus, the acquisition process and the production disposition are highly interrelated. In further consequence, the linked view on an active acquisition process combined with manufacturing–remanufacturing decisions is essential. In this paper, the optimal strategies concerning the acquisition of used cores, manufacturing of new products, and remanufacturing are studied analytically in a two-period model with stochastic, newsvendor-like demands. Given the closed-loop setting, the quantity acquired and remanufactured in the second period is limited to the sales of new products in the first period. An extensive numerical study provides insights into the influence of an active acquisition process on quantities and profit.