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Inventory optimization in a one product recoverable manufacturing system

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  • Sebnem Ahiska, S.
  • King, Russell E.

Abstract

Environmental regulations or the necessity for a 'green image' due to growing environmental concerns, as well as the potential economical benefits of product recovery, have pushed manufacturers to integrate product recovery management with their manufacturing process. Consequently, production planning and inventory control of recoverable manufacturing systems has gained significant interest among researchers who aim to contribute to industrial practice. This paper considers inventory optimization of a single product recoverable manufacturing system where customer demands are satisfied through either regular production (manufacturing) of new items or remanufacturing of returned items. We present robust, implementable characterizations of the optimal manufacturing/remanufacturing inventory policies found using Markov decision processes. We extend the results in the literature by considering setup costs and different lead time cases for manufacturing and remanufacturing.

Suggested Citation

  • 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.
  • Handle: RePEc:eee:proeco:v:124:y:2010:i:1:p:11-19
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    References listed on IDEAS

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    1. Kiesmuller, Gudrun P. & Scherer, Carsten W., 2003. "Computational issues in a stochastic finite horizon one product recovery inventory model," European Journal of Operational Research, Elsevier, vol. 146(3), pages 553-579, May.
    2. 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.
    3. van der Laan, Erwin & Salomon, Marc, 1997. "Production planning and inventory control with remanufacturing and disposal," European Journal of Operational Research, Elsevier, vol. 102(2), pages 264-278, October.
    4. L. Beril Toktay & Lawrence M. Wein & Stefanos A. Zenios, 2000. "Inventory Management of Remanufacturable Products," Management Science, INFORMS, vol. 46(11), pages 1412-1426, November.
    5. van der Laan, Erwin & Dekker, Rommert & Salomon, Marc, 1996. "Product remanufacturing and disposal: A numerical comparison of alternative control strategies," International Journal of Production Economics, Elsevier, vol. 45(1-3), pages 489-498, August.
    6. Fleischmann, Moritz & Bloemhof-Ruwaard, Jacqueline M. & Dekker, Rommert & van der Laan, Erwin & van Nunen, Jo A. E. E. & Van Wassenhove, Luk N., 1997. "Quantitative models for reverse logistics: A review," European Journal of Operational Research, Elsevier, vol. 103(1), pages 1-17, November.
    7. Mahadevan, B. & Pyke, David F. & Fleischmann, Moritz, 2003. "Periodic review, push inventory policies for remanufacturing," European Journal of Operational Research, Elsevier, vol. 151(3), pages 536-551, December.
    8. Teunter, Ruud H. & Vlachos, Dimitrios, 2002. "On the necessity of a disposal option for returned items that can be remanufactured," International Journal of Production Economics, Elsevier, vol. 75(3), pages 257-266, February.
    9. Erwin van der Laan & Marc Salomon & Rommert Dekker & Luk Van Wassenhove, 1999. "Inventory Control in Hybrid Systems with Remanufacturing," Management Science, INFORMS, vol. 45(5), pages 733-747, May.
    10. Kiesmuller, G. P., 2003. "A new approach for controlling a hybrid stochastic manufacturing/remanufacturing system with inventories and different leadtimes," European Journal of Operational Research, Elsevier, vol. 147(1), pages 62-71, May.
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    Cited by:

    1. Chen, Wenyi & Kucukyazici, Beste & Verter, Vedat & Jesús Sáenz, María, 2015. "Supply chain design for unlocking the value of remanufacturing under uncertainty," European Journal of Operational Research, Elsevier, vol. 247(3), pages 804-819.
    2. Muris Lage Junior & Moacir Godinho Filho, 2017. "Master disassembly scheduling in a remanufacturing system with stochastic routings," Central European Journal of Operations Research, Springer;Slovak Society for Operations Research;Hungarian Operational Research Society;Czech Society for Operations Research;Österr. Gesellschaft für Operations Research (ÖGOR);Slovenian Society Informatika - Section for Operational Research;Croatian Operational Research Society, vol. 25(1), pages 123-138, March.
    3. Ahiska, S. Sebnem & Appaji, Samyuktha R. & King, Russell E. & Warsing, Donald P., 2013. "A Markov decision process-based policy characterization approach for a stochastic inventory control problem with unreliable sourcing," International Journal of Production Economics, Elsevier, vol. 144(2), pages 485-496.
    4. García-Alvarado, M.S. & Paquet, M. & Chaabane, A., 2015. "On inventory control of product recovery systems subject to environmental mechanisms," International Journal of Production Economics, Elsevier, vol. 165(C), pages 132-144.
    5. Bertazzi, Luca, 2011. "Determining the optimal dimension of a work-in-process storage area," International Journal of Production Economics, Elsevier, vol. 131(2), pages 483-489, June.

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