Dynamic pricing models for used products in remanufacturing with lost-sales and uncertain quality

In this paper, we investigate the remanufacturing problem of pricing single-class used products (cores) in the face of random price-dependent returns and random demand. Specifically, we propose a dynamic pricing policy for the cores and then model the problem as a continuous-time Markov decision process. Our models are designed to address three objectives: finite horizon total cost minimization, infinite horizon discounted cost, and average cost minimization. Besides proving optimal policy uniqueness and establishing monotonicity results for the infinite horizon problem, we also characterize the structures of the optimal policies, which can greatly simplify the computational procedure. Finally, we use computational examples to assess the impacts of specific parameters on optimal price and reveal the benefits of a dynamic pricing policy. © 2013 Elsevier B.V. All rights reserved.

Dynamic evolution of the genetic search region through fuzzy coding

A technique for automatic exploration of the genetic search region through fuzzy coding (Sharma and Irwin, 2003) has been proposed. Fuzzy coding (FC) provides the value of a variable on the basis of the optimum number of selected fuzzy sets and their effectiveness in terms of degree-of-membership. It is an indirect encoding method and has been shown to perform better than other conventional binary, Gray and floating-point encoding methods. However, the static range of the membership functions is a major problem in fuzzy coding, resulting in longer times to arrive at an optimum solution in large or complicated search spaces. This paper proposes a new algorithm, called fuzzy coding with a dynamic range (FCDR), which dynamically allocates the range of the variables to evolve an effective search region, thereby achieving faster convergence. Results are presented for two benchmark optimisation problems, and also for a case study involving neural identification of a highly non-linear pH neutralisation process from experimental data. It is shown that dynamic exploration of the genetic search region is effective for parameter optimisation in problems where the search space is complicated.

Dynamic pricing for used products in remanufacturing with back orders(ABS 3* Journal, Accepted with Revision on 2nd December 2011).

In remanufacturing, the supply of used products and the demand for remanufactured products are usually mismatched because of the great uncertainties on both sides. In this paper, we propose a dynamic pricing policy to balance this uncertain supply and demand. Specifically, we study a remanufacturer’s problem of pricing a single class of cores with random price-dependent returns and random demand for the remanufactured products with backlogs. We model this pricing task as a continuous-time Markov decision process, which addresses both the finite and infinite horizon problems, and provide managerial insights by analyzing the structural properties of the optimal policy. We then use several computational examples to illustrate the impacts of particular system parameters on pricing policy.