Conclusion, Suggestions, And Managerial Implications

Conclusion Suggestions And Managerial Implicationsthe Focus Of Thi

The focus of this study is on CLSCC for new product and its reconditioned version. Our integrated CLSCC optimization model simultaneously determines optimal production and sales plans as well as the configuration of the entire supply chain. We conducted a real-world case study of a battery manufacturer based in India to test our model. The analysis reveals important insights into the performance and strategic implications of adopting a CLSCC approach in this context.

Firstly, the results indicate that our integrated CLSCC model outperforms the firm's existing supply chain design. Specifically, the model suggests that higher sales revenue could be achieved by selecting alternative suppliers characterized by shorter lead times than the current suppliers. Nevertheless, the firm opts to maintain its long-term relationships due to established trust, highlighting the critical role of relational capital in supply chain decisions. The management perceives the transition to new suppliers as risky and potentially cost-increasing, underscoring the importance of balancing strategic benefits against operational risks.

From a managerial perspective, it is advisable for firms to quantitatively assess the potential costs and benefits associated with switching suppliers. While initial costs may be higher, other factors such as reduced lead times, lower inventory holding costs, and improved responsiveness could contribute to enhanced overall profitability. Our model's results, based on aggregate data from various international sources, suggest that integrating reconditioning and supply chain optimization can lead to a 25% increase in net profit despite a marginal 2% increase in costs. Conversely, when applying the model to data specific to Xtra Power, the scenario indicates an 86% cost increase with a 17% rise in net profit, emphasizing the case-specific nature of these outcomes.

The findings highlight that the benefit-cost ratio diminishes in Xtra Power's scenario; however, this should not be over-generalized as the results are case-dependent. The firm’s decision to pay approximately 13–15% of the new battery's price to acquire used batteries to match competitors' rates illustrates strategic threshold-setting. Our model determines a maximum acquisition price—beyond which the CLSCC approach becomes unprofitable—providing a vital managerial tool for pricing and procurement decisions. Increasing the acquisition rate to gather sufficient used batteries can justify higher costs and improve the profitability of reconditioning activities.

Additionally, the study underscores the importance of sales price ratios of new versus reconditioned batteries, which influence the relationship between profit margins and return rates. While higher return rates are generally thought to boost profits, our results suggest this relationship is contingent on how sales prices are set for both product types. Consequently, managers should carefully consider the interplay between pricing strategies and return rates in their decision-making frameworks.

Furthermore, future research could extend the current model by incorporating multiple options at each decision stage, recognizing that real-world processes often involve sequential and multi-option choices. The assumption that firms receive a fixed proportion of sales after the useful life is another simplification; in practice, returns may be received at any time, requiring dynamic modeling approaches. Addressing demand uncertainties—whether for reconditioned products or their market demand—is critical to enhance model applicability.

The current study assumes all returned used products are reconditioned and sold within the same period, which may not align with strategic inventory decisions involving multiple periods. Future studies could relax this assumption and explore multi-period inventory and scheduling models. Similarly, recognizing differing quality levels among received used products and incorporating these variations can improve the model's realism. Integrating competitive market elements remains another promising avenue, as competition directly impacts supply chain configurations and profitability.

Lastly, the existing model focuses on a single product; however, extending it to platform products or multi-product scenarios could enhance its utility in broader manufacturing contexts. Considering supply chain risks associated with single sourcing and exploring multi-sourcing strategies would also provide valuable insights into risk mitigation and resilience in the CLSCC framework.

Conclusion and managerial implications

In conclusion, this research underscores the potential benefits of integrating closed-loop supply chain configurations with competitive decision-making processes. Managers should carefully evaluate supplier relationships, acquisition costs, and pricing strategies in reconditioning operations. Employing quantitative models can facilitate informed strategic decisions that optimize profitability while managing risks. As industries increasingly adopt circular economy principles, supply chain models like CLSCC will be vital tools for achieving sustainable and profitable operations.

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