The Value of Information in Reverse Logistics

43 Pages Posted: 27 Sep 2004

See all articles by Michael E. Ketzenberg

Michael E. Ketzenberg

Colorado State University, Fort Collins - Department of Management

E. van der Laan

Erasmus University Rotterdam (EUR) - Department of Technology and Operations Management; Erasmus Research Institute of Management (ERIM)

Ruud Teunter

Erasmus University Rotterdam (EUR) - Department of Econometrics; Erasmus Research Institute of Management (ERIM)

Date Written: June 2004 8,

Abstract

We explore the value of information in the context of a remanufacturer that faces uncertainty with respect to demand, product return, and product recovery (yield loss). We assume a single period model in which the operational decision of interest is the quantity of new product to order. Our objective is to evaluate the absolute and relative value of the different types of information that such a firm may choose to invest in order to reduce the uncertainty it experiences in matching supply with demand. The different types of information include demand, return, and yield loss. Our results are extensive and reveal that the value for any specific type of information depends both on the overall level of uncertainty and the level of uncertainty that is attributed to the information for which it explains. We develop and test a theoretical model that is predictive of 1) the value of each type of information, 2) the conditions that give rise to the value for each type of information, and 3) the relative value for each type of information.

Keywords: value of information, newsvendor problem, remanufacturing, inventory control

JEL Classification: M, M11, R4, C53

Suggested Citation

Ketzenberg, Michael E. and van der Laan, Erwin A. and Teunter, Ruud, The Value of Information in Reverse Logistics (June 2004 8,). Available at SSRN: https://ssrn.com/abstract=594989

Michael E. Ketzenberg (Contact Author)

Colorado State University, Fort Collins - Department of Management ( email )

College of Business
Fort Collins, CO 80523-1275
United States
970-491-7154 (Phone)
970-491-3522 (Fax)

Erwin A. Van der Laan

Erasmus University Rotterdam (EUR) - Department of Technology and Operations Management ( email )

RSM Erasmus University
PO Box 1738
3000 DR Rotterdam
Netherlands

Erasmus Research Institute of Management (ERIM) ( email )

P.O. Box 1738
3000 DR Rotterdam
Netherlands

Ruud Teunter

Erasmus University Rotterdam (EUR) - Department of Econometrics ( email )

P.O. Box 1738
3000 DR Rotterdam
Netherlands
+31 1 408 1523/9162 (Phone)

Erasmus Research Institute of Management (ERIM) ( email )

P.O. Box 1738
3000 DR Rotterdam
Netherlands

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