Optimal disposition decisions for a remanufacturing system considering time value of products

• Optimal disposition.
• Quantity to remanufacture.
• Quantity to salvage.
• Deterioration value for returns and time value of the products.

This paper studies disposition decisions of cores where the value of returns deteriorates over time. Mainly in disposition decisions, a remanufacturer is interested to determine how many units to remanufacture and to salvage. To address this research problem along with value deterioration of returns, a rough-cut mathematical model is developed by considering various parameters of interest such as selling price, salvage value and remanufacturing rate with the aim to maximize total profit. Due to uncertainty limitations, the model can provide decision-makers with relevant insights about disposition decisions. Simulation modeling techniques are used to validate the proposed model. Numerical examples are presented to demonstrate the applicability of the model and to show the negative relation between the deterioration rate and the total profit. However, the above-indicated parameters of selling price, salvage value and remanufacturing rate work the opposite way.