A Model for Improving Economic Performance of a Demanufacturing System for Reduced Product End-of-Life Environmental Impact

A demanufacturing facility benefits the environment by removing end-of-life products from the disposal waste stream. The facility dismantles end-of-life products and then places salvaged components into inventory for subsequent sale to remanufacturers and other firms. Lack of profitability will cause a demanufacturing facility to abandon its mission, with the environment suffering as a result. A model is presented for a demanufacturing facility that describes the disassembly process activities, the accumulation of component inventories, component sale based on market price behavior, and inventory management costs. The effect of three selling policies on financial performance is investigated. Selling policy is seen to be the dominant factor in determining profitability, with transaction and holding costs also influencing the performance.