Robust multiperiod inventory model considering trade-in program and refurbishment service: Implications to emerging markets

Abstract

We propose a closed-loop supply chain system that incorporates a trade-in program and refurbishment service simultaneously. Through the trade-in program, retailers collect used old-generation products from customers and provide them with new-generation products at a discount price. It helps to acquire the additional products required for the refurbishment service. The proposed integrated system could be useful to retailers selling the smartphone which has a high potential in emerging markets. We approximate the multistage stochastic optimization model to the robust counterpart which features a second-order cone program. Computational results provide managerial insights that could be beneficial to the retailer.