Product Acquisition Management
Consider a €rm that tries to determine the acquisition quantity of used items to satisfy a €xed demand of D (Galbreth and Blackburn, 2010). If all returned items are assumed to be in good condition, an acquisition quantity of D will be enough to cover the demand. However, this assumption is not realistic considering the high level of uncertainty associated with item returns. That is why the €rm has to acquire additional returned items beyond D. By doing this, it can prevent the remanufacturing of returned items that are not in good condition. We will determine the optimum acquisition quantity by considering three different cases of condition variability.