The value of information systems for product recovery management
This article sheds light on the role of information systems in product recovery management. We first develop analytical models and then provide a numerical example to determine under what conditions investments in Information-intensive Product Recovery Systems (IPRS) are economically
justifiable for manufacturers and when policy-makers need to consider facilitating their implementation. The results of the analytical models indicate that the recovery network (collection) structure and product characteristics determine if precision improvements or increased sorting speed
associated with IS investments will lead to higher profit gains. Manufacturers should carefully assess conflicting impacts of current manufacturing and recycling technology trends on the value of IPRS. Implementing IPRS might end up reducing manufacturers' profits under a highly time efficient
decentralised collection structure. We show that negotiations with competitors about IPRS implementation may lead to a win–win situation and allow consumers to enjoy the lowest product price if the binding force of the agreement is strong. Otherwise, some manufacturers follow free-rider
strategies. This article has immediate application to manufacturers' IS strategy and to government policy-makers considering investing in and/or structuring product recovery closed-loop supply chain processes within their jurisdictions. It also opens a potential stream of research concerning
the role of IPRS to automate, informate and transform closed-loop supply chains for eco-efficiency.
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closed-loop supply chain;
product recovery management
Document Type: Research Article
School of Administrative Studies,York University, Toronto, Canada
Institute for Transport and Logistics Management,WU (Vienna University of Economics and Business), Vienna, Austria
Department for Management Information Systems, Fogelman College of Business & Economics,The University of Memphis, Memphis, USA
February 15, 2013
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