Mechanical Engineering Commons^™

Pricing Of End-Of-Life Items With Obsolescence, Srikanth Vadde, Sagar V. Kamarthi, Surendra M. Gupta

Sagar Kamarthi

Variability in the inflow of end-of-life (EOL) products and fluctuating inventory levels often make the processing of EOL products an economically risky operation for product recovery facilities (PRFs). Choosing an appropriate pricing policy can enhance the performance of PRFs by methodically clearing their inventory and increasing profits. This work presents two pricing models to counter the prospect of product obsolescence that can happen either gradually or suddenly. Product obsolescence can cause demand drop and inventory pile up, both of which could dent the revenues of PRFs. In the first model, gradual obsolescence and environmental regulations that limit the disposal quantity …