An analytical model for reverse automotive production planning and pricing

Qu, Xiuli (author)
Williams, Julie Ann Stuart (author)

European Journal of Operational Research

0377-2217

3

1

756

767

2008

10.1016/j.ejor.2007.06.041

2007 Elsevier B.V.

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%.

Automotive shredding
Pricing
Reverse production planning
Environment

uwf:23660