IDEAS home Printed from
   My bibliography  Save this article

Heuristics for the stochastic economic lot sizing problem with remanufacturing under backordering costs


  • Kilic, Onur A.
  • Tunc, Huseyin


We consider a production system where demand can be met by manufacturing new products and remanufacturing returned products, and address the economic lot sizing problem therein. The system faces stochastic and time-varying demands and returns over a finite planning horizon. The problem is to match supply with demand, while minimizing the total expected cost which is comprised of fixed production costs and inventory (holding and backordering) costs. We introduce heuristic policies for this problem which offer different levels of flexibility with respect to production decisions. We present computational methods for these policies based on convex optimization and certainty equivalent mixed integer programming, and numerically assess their cost performance and computational efficiency by means of simulation.

Suggested Citation

  • Kilic, Onur A. & Tunc, Huseyin, 2019. "Heuristics for the stochastic economic lot sizing problem with remanufacturing under backordering costs," European Journal of Operational Research, Elsevier, vol. 276(3), pages 880-892.
  • Handle: RePEc:eee:ejores:v:276:y:2019:i:3:p:880-892
    DOI: 10.1016/j.ejor.2019.01.051

    Download full text from publisher

    File URL:
    Download Restriction: Full text for ScienceDirect subscribers only

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    1. Mathijn Retel Helmrich & Raf Jans & Wilco van den Heuvel & Albert Wagelmans, 2014. "Economic lot-sizing with remanufacturing: complexity and efficient formulations," IISE Transactions, Taylor & Francis Journals, vol. 46(1), pages 67-86.
    2. Ahiska, S. Sebnem & King, Russell E., 2010. "Life cycle inventory policy characterizations for a single-product recoverable system," International Journal of Production Economics, Elsevier, vol. 124(1), pages 51-61, March.
    3. van der Laan, Erwin A. & Teunter, Ruud H., 2006. "Simple heuristics for push and pull remanufacturing policies," European Journal of Operational Research, Elsevier, vol. 175(2), pages 1084-1102, December.
    4. Teunter, Ruud & Kaparis, Konstantinos & Tang, Ou, 2008. "Multi-product economic lot scheduling problem with separate production lines for manufacturing and remanufacturing," European Journal of Operational Research, Elsevier, vol. 191(3), pages 1241-1253, December.
    5. Heisig, Gerald, 2001. "Comparison of (s,S) and (s,nQ) inventory control rules with respect to planning stability," International Journal of Production Economics, Elsevier, vol. 73(1), pages 59-82, August.
    6. Zhijie Tao & Sean X. Zhou, 2014. "Approximation Balancing Policies for Inventory Systems with Remanufacturing," Mathematics of Operations Research, INFORMS, vol. 39(4), pages 1179-1197, November.
    7. James H. Bookbinder & Jin-Yan Tan, 1988. "Strategies for the Probabilistic Lot-Sizing Problem with Service-Level Constraints," Management Science, INFORMS, vol. 34(9), pages 1096-1108, September.
    8. Sebnem Ahiska, S. & King, Russell E., 2010. "Inventory optimization in a one product recoverable manufacturing system," International Journal of Production Economics, Elsevier, vol. 124(1), pages 11-19, March.
    9. Stephen C. Graves & Sean P. Willems, 2008. "Strategic Inventory Placement in Supply Chains: Nonstationary Demand," Manufacturing & Service Operations Management, INFORMS, vol. 10(2), pages 278-287, March.
    10. John J. Neale & Sean P. Willems, 2009. "Managing Inventory in Supply Chains with Nonstationary Demand," Interfaces, INFORMS, vol. 39(5), pages 388-399, October.
    11. Timo Hilger & Florian Sahling & Horst Tempelmeier, 2016. "Capacitated dynamic production and remanufacturing planning under demand and return uncertainty," OR Spectrum: Quantitative Approaches in Management, Springer;Gesellschaft für Operations Research e.V., vol. 38(4), pages 849-876, October.
    12. Panagiotidou, Sofia & Nenes, George & Zikopoulos, Christos & Tagaras, George, 2017. "Joint optimization of manufacturing/remanufacturing lot sizes under imperfect information on returns quality," European Journal of Operational Research, Elsevier, vol. 258(2), pages 537-551.
    13. repec:eee:ejores:v:267:y:2018:i:3:p:1102-1109 is not listed on IDEAS
    14. Fleischmann, Moritz & Kuik, Roelof, 2003. "On optimal inventory control with independent stochastic item returns," European Journal of Operational Research, Elsevier, vol. 151(1), pages 25-37, November.
    15. V. Daniel R. Guide & Luk N. Van Wassenhove, 2009. "OR FORUM---The Evolution of Closed-Loop Supply Chain Research," Operations Research, INFORMS, vol. 57(1), pages 10-18, February.
    16. repec:taf:tprsxx:v:55:y:2017:i:4:p:1210-1225 is not listed on IDEAS
    17. Kenné, Jean-Pierre & Dejax, Pierre & Gharbi, Ali, 2012. "Production planning of a hybrid manufacturing–remanufacturing system under uncertainty within a closed-loop supply chain," International Journal of Production Economics, Elsevier, vol. 135(1), pages 81-93.
    Full references (including those not matched with items on IDEAS)


    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:ejores:v:276:y:2019:i:3:p:880-892. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Dana Niculescu). General contact details of provider: .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.