R.K. Amit

Bio: R.K. Amit is an academic researcher from Indian Institute of Technology Madras. The author has contributed to research in topics: Supply chain & Newsvendor model. The author has an hindex of 9, co-authored 23 publications receiving 193 citations. Previous affiliations of R.K. Amit include Indian Institute of Science & Indian Institutes of Technology.

Price optimization of multi-stage remanufacturing in a closed loop supply chain

Abstract: In a remanufacturing process within the closed loop supply chain (CLSC) the manufacturers collect the end of life or used products from the customers and repair/refurbish them to sell it along with newly manufactured products. This phenomenon is common for products which are mechanical in nature and contains more reuse value. The reverse supply chain part of acquiring the used products incurs acquisition cost and remanufacturing cost, which depends on the quality or grade of returned product. Generally, the remanufacturers pay higher acquisition prices for good quality returned products and lower acquisition prices for poor quality returned products. Also, the remanufacturing cost is a decreasing function of the quality of the returned products. But if the returned product can be refurbished and remanufactured in the corresponding stage of supply chain, it can be sold along with newly manufactured product. Inclusion of remanufactured products will reduce the demand of raw materials or sub components required from suppliers. This reduction in this cost may be transferred in the form of price of the product charged to the customer in forward supply chain. With this backdrop, a non-linear unconstrained model is proposed with the objective of maximizing closed-loop supply chain (including remanufactured products) profitability considering a price dependent demand. The decision variables to be determined are sale price, acquisition prices for stages, total return percentage to be accepted and their distribution. Some interesting insights can be drawn to analyse whether there will be price difference in CLSC arrangements compared to only forward supply chain without considering remanufactured products. A numerical example along with sensitivity analyses at the end gives the insights regarding circumstances under which CLSC operation is really profitable vis-a-vis FSC operation only.

Loss aversion and rationality in the newsvendor problem under recourse option

Abstract: Risk neutral assumption in the newsvendor problem under recourse option predicts the order quantity insensitive to the selling price; and, risk aversion modeled through common utility functions gives decreasing order quantity with increasing selling price. In this paper, we consider loss aversion to model the choice preference of the decision maker in the newsvendor problem under recourse option, and prove that loss aversion predicts the rational ordering behavior of the newsvendor with respect to the changes in price and cost parameters. Further, we find that loss aversion can significantly improve the performance of utility function based models in predicting the rational behavior. We extend the analysis to a supply chain setting and establish coordinating contract between a loss averse retailer facing a newsvendor problem and a risk neutral supplier under recourse option. We find that the contract parameter does not depend on the loss aversion; hence, the same contract can be implemented with retailers with different levels of loss aversion.

Individually rational buyback contracts with inventory level dependent demand

Abstract: In this paper, we consider a supply chain coordination problem when demand faced by a retailer is influenced by the amount of inventory displayed on the retail shelf. We assume that shelf space inventory is used as one of the levers to stimulate demand. Our objective in this research is to design individually rational contracts that coordinate the supply chain when the retailer faces inventory-level-dependent demand. We consider a buyback contract where any leftover inventory at the retailer can be returned to the supplier at a pre-specified terms of the buyback contract. The existing buyback contracts in the supply chain coordination literature do not guarantee the satisfaction of individual rationality constraint. A continuum of buyback contracts coordinate the supply chain. The contracts may differ on the basis of division of profits resulting in contracts that may not be individually rational. This motivates us to use the Shapley value from the cooperative game theory which ensures fairness and individual rationality in the buyback contract. We also provide managerial insights into the design of the contracts and analyze the impact of shelf space inventory on the contract parameters.

Dismantlers’ dilemma in end-of-life vehicle recycling markets: a system dynamics model

Abstract: Stringent environmental regulations, improving technology, and growing incomes have shortened vehicle life-cycles that leads to increasing number of end-of life vehicles (ELVs). ELVs form a valuable source of materials when they are recycled in an efficient manner. Regulated ELV recycling markets for ELV recycling ensure an efficient material recovery, unlike unregulated markets which are present predominantly in emerging economies. We analyze ELV recycling in an unregulated market through a system dynamics model. These markets are close to perfectly competitive markets with low enter and exit barriers for dismantlers, and the scrap from dismantled vehicles is traded as a commodity. Dismantlers entry and exit decisions—dismantlers’ dilemma—are based on profitability. We conjecture that the dismantlers’ dilemma constrains the dismantling capacity and fluctuates the scrap supply in unregulated recycling markets. Using the Indian data, the simulation results show that the unregulated market will lead to lower dismantling capacity, which may further worsen by increase in dismantling costs. From our analysis, we suggest that lowering dismantling costs through coordination among the dismantlers and providing support for scrap prices through regulation can improve the dismantling situation in these markets.

Measuring affordability of access to clean water: A coping cost approach

Abstract: Sustainable Development Goal 6.1 is “to achieve universal and equitable access to safe and affordable drinking water for all”. To measure affordability of accessing clean water, coping cost approach has been adopted, and this paper contributes to the burgeoning empirical literature on measuring affordability. The objective of this paper is to estimate coping costs related to the erratic, unsafe, and inadequate water supply in the metropolitan area of Chennai, India. Based on the data collected from 423 households, we find that households in Chennai city resort to five main types of coping behaviors: collecting, pumping, treating, storing, and purchasing. We employ the multiple regression with robust errors, to estimate the determinants of the coping costs. We obtain the mean coping costs as INR (Indian Rupee) 553, and INR 658 per month for piped and non-piped households in this sample. For non-piped households, collection costs (time costs in traveling and queuing for collecting water) constitute 22% of the coping costs, while collection costs for piped households are less 2% of the coping costs. One interesting finding is the variation of coping costs with household income—these costs are roughly 1% of income for the high income households to as high as 15% for the low income households. The results outline the need of policy intervention to enhance affordability.

Optimal inventory policy for a perishable item with demand function sensitive to price and time

Abstract: We formulate a model for determining the optimal pricing, order quantity and replenishment period for perishable items with price-dependent and time-dependent demand. The items have a fixed shelf-life, and the demand rate decreases linearly in the selling price and polynomially over the time after replenishment, until it vanishes either at the reservation price or at expiration time. We prove that the three-variable profit maximization problem can be reduced into a single-variable problem, in which the variable is the duration of the replenishment period. We show that the profit function is strictly pseudo-concave and provide means of obtaining the optimal policy. Three numerical examples are presented to demonstrate the model accompanied by a sensitivity analysis.