Decision rules for recycling returned products

Most retail and on-line outlets allow customers to easily return defective or even non-defective products. Due to increasing environmental and sustainable concerns, disposal of returned products is often costly and undesirable. Furthermore, these products contain parts and materials of value that can contribute to the companies' profit. One way to take advantage of these returns is by utilising good returned parts in production of after-market products. Recycling of parts from products at the end of their useful lives has been studied for a long time. Many of these studies, however, are focused on repairs and refurbishing of such products for reuse. This paper addresses recycling of rather new parts recovered from returned products. In this process parts are assembled with other parts recovered from other products to make a complete unit. The main objective of this study is to provide quantitative decision rules for justification of recycling of returned parts. The proposed method consists of a computer-based simulation decision model that, given a set of production system parameters, determines the breakeven point for the primary production rate at which recycling is justified. The application of the system to several scenarios is demonstrated through a numerical example.