MANUFACTURING NETWORK CONFIGURATION IN SUPPLY CHAINS WITH FORWARD FLEXIBILITY FOR PRODUCT RECOVERY BASED ON SEQUENTIAL DESIGN

To examine the capacity decisions and expected performance of two alternative manufacturing network configurations with forward flexibility for product recovery of a firm that manufactures new products and remanufactures returned products in its facilities when demand and return flows are both uncertain, two-stage stochastic programs are formulated. Based on numerical studies, the results indicate that the investigated structures can lead to very different expected profits, investment costs of (re-)manufacturing capacity and market structure have a strong impact on the choice of a network configuration, but the forward flexibility for product recovery has a weak impact when increasing the network size n. We also examine the sensitivity of network performance to changes in return volumes, return variability. Based on these results, we find that integrated network plants are more beneficial in the common market settings, but decentralized network plants have more predominance in the separate market settings.