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A joint inventory model for an open-loop reverse supply chain

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  • Gou, Qinglong
  • Liang, Liang
  • Huang, Zhimin
  • Xu, Chuanyong
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    Abstract

    This research focuses on an open-loop reverse supply chain, which includes a single centralized returns center (CRC) and multiple local collection points (LCPs). Each LCP receives a stream of returned products from consumers and once its inventory reaches its economic inventory level, these products are immediately delivered to the CRC. The CRC begins to handle those returned products when its inventory reaches its economic batch size. Special attention is placed on the joint inventory control and product return handling policies. The purpose of this study is to find the optimal economic delivery batch size for the LCPs as well as the optimal handling batch size for the CRC in order to minimize the long-run average cost for the open-loop reverse supply chain. An algorithm to find an optimal policy of delivery batch size for LCPs and handling batch size for CRC is developed. We present detailed discussions on how the optimal policy of delivery as well as the handling batch sizes changes with respect to changes in system parameters. We show that the formulas for optimal policies of delivery and handling batch sizes are modifications of the EOQ model. Simulation results illustrate that our model development is suitable for more general situations.

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    Bibliographic Info

    Article provided by Elsevier in its journal International Journal of Production Economics.

    Volume (Year): 116 (2008)
    Issue (Month): 1 (November)
    Pages: 28-42

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    Handle: RePEc:eee:proeco:v:116:y:2008:i:1:p:28-42

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    Web page: http://www.elsevier.com/locate/ijpe

    Related research

    Keywords: Supply chain management Open-loop system Manufacturing Joint inventory Sensitivity analyses;

    References

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    13. Devavrat Purohit, 1992. "Exploring the Relationship Between the Markets for New and Used Durable Goods: The Case of Automobiles," Marketing Science, INFORMS, vol. 11(2), pages 154-167.
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    Citations

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    Cited by:
    1. Dobos, Imre & Gobsch, Barbara & Pakhomova, Nadezhda & Pishchulov, Grigory & Richter, Knut, 2011. "A vendor-purchaser economic lot size problem with remanufacturing and deposit," Discussion Papers 304, European University Viadrina Frankfurt (Oder), Department of Business Administration and Economics.
    2. Raymond Houé Ngouna & Bernard Grabot, 2009. "Assessing the compliance of a product with an eco-label: from standards to constraints," Post-Print hal-00965906, HAL.
    3. Parsa, Hossein & Jin, Mingzhou, 2013. "An improved approximation for the renewal function and its integral with an application in two-echelon inventory management," International Journal of Production Economics, Elsevier, vol. 146(1), pages 142-152.
    4. Gunasekaran, Angappa & Spalanzani, Alain, 2012. "Sustainability of manufacturing and services: Investigations for research and applications," International Journal of Production Economics, Elsevier, vol. 140(1), pages 35-47.
    5. Houe, Raymond & Grabot, Bernard, 2009. "Assessing the compliance of a product with an eco-label: From standards to constraints," International Journal of Production Economics, Elsevier, vol. 121(1), pages 21-38, September.
    6. Jonrinaldi, & Zhang, D.Z., 2013. "An integrated production and inventory model for a whole manufacturing supply chain involving reverse logistics with finite horizon period," Omega, Elsevier, vol. 41(3), pages 598-620.
    7. Sabharwal, Srishti & Garg, Suresh, 2013. "Determining cost effectiveness index of remanufacturing: A graph theoretic approach," International Journal of Production Economics, Elsevier, vol. 144(2), pages 521-532.

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