Asset management with reverse product flows and environmental considerations

Today many business enterprises employ capital assets in the form of electronic equipment, such as personal computers, workstations and peripherals, in large quantities. Due to rapid technological progress (leading to a short life cycle for these products), and hazardous material content in electronic products (which is an environmental problem and a disposal challenge), leasing or procurement contracts with take-back considerations can be attractive. For a large electronic equipment leasing company, optimal management of assets supported by good logistics and end-of-life processing decisions is crucial, and may provide a significant competitive advantage. There is currently no analytic approach for making these decisions in an integrated fashion. In this research, a mixed integer linear programming (MILP) model is developed to facilitate better leasing and logistics decisions (including end-of-life disposal options) from the perspective of an electronic equipment leasing company. A case study with representative industry data is used to validate the approach and potential applications of the model are illustrated for alternative scenarios. This research contributes new models and understanding to the intersection of the fields of reverse logistics and equipment replacement.