CUED Publications database

Value of information in product recovery decisions: A Bayesian approach

Parlikad, AK and McFarlane, D (2010) Value of information in product recovery decisions: A Bayesian approach. International Journal of Sustainable Engineering, 3. pp. 106-120. ISSN 1939-7038

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Abstract

There is a widespread recognition of the need for better information sharing and provision to improve the viability of end-of-life (EOL) product recovery operations. The emergence of automated data capture and sharing technologies such as RFID, sensors and networked databases has enhanced the ability to make product information; available to recoverers, which will help them make better decisions regarding the choice of recovery option for EOL products. However, these technologies come with a cost attached to it, and hence the question 'what is its value?' is critical. This paper presents a probabilistic approach to model product recovery decisions and extends the concept of Bayes' factor for quantifying the impact of product information on the effectiveness of these decisions. Further, we provide a quantitative examination of the factors that influence the value of product information, this value depends on three factors: (i) penalties for Type I and Type II errors of judgement regarding product quality; (ii) prevalent uncertainty regarding product quality and (iii) the strength of the information to support/contradict the belief. Furthermore, we show that information is not valuable under all circumstances and derive conditions for achieving a positive value of information. © 2010 Taylor & Francis.

Item Type: Article
Uncontrolled Keywords: Bayes' factor Decision modelling Probability Product recovery decisions Value of information
Subjects: UNSPECIFIED
Divisions: Div E > Manufacturing Systems
Depositing User: Cron Job
Date Deposited: 07 Mar 2014 11:40
Last Modified: 08 Dec 2014 02:33
DOI: 10.1080/19397030903499810