Product recovery systems: policy issues and disposition decisions

Official URL: http://192.168.1.20/record=b1293619 (Table of Contents)

In the last few decades, worsening environmental problems have attracted attention to sustainable development practices. In this respect, product recovery, which aims to regain the value in end-of-life products and, thus can be regarded as an implementation towards sustainable development at the firm level, has gained importance. This dissertation addresses two interrelated decisions in the context of product recovery systems: at the strategic level, we analyze the impact of environmental policy as a coercive force on product recovery undertakings of firms; and at the tactical level, we explore the disposition decisions of a firm who is already engaged in product recovery. First, we focus on one of the main motivators of recovery practices; environmental legislation, and investigate its effectiveness in encouraging manufacturers for product recovery and redesign. We find that initial investment requirements may have a serious impact on the legislation's effectiveness. We, then, focus on two common forms of take-back legislation (tax and rate models) and compare them from the perspective of different stakeholders. We observe that in terms of the profitability of the two forms, there are some misalignments between the incentives of different stakeholders (the social planner, the manufacturers and the environment). Furthermore, we consider the decisions of a firm engaged in recovery operations and investigate the associated disposition decisions. We address this problem employing a common revenue management technique of bid price controls. As a result of our numerical experiments, we find that a dynamic approach based on bid price controls significantly outperforms a static one.