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Production planning of a hybrid manufacturing–remanufacturing system under uncertainty within a closed-loop supply chain

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  • Kenné, Jean-Pierre
  • Dejax, Pierre
  • Gharbi, Ali

Abstract

This paper deals with the production planning and control of a single product involving combined manufacturing and remanufacturing operations within a closed-loop reverse logistics network with machines subject to random failures and repairs. While consumers traditionally dispose of products at the end of their life cycle, recovery of the used products may be economically more attractive than disposal, while remanufacturing of the products also pursues sustainable development goals. Three types of inventories are involved in this network. The manufactured and remanufactured items are stored in the first and second inventories. The returned products are collected in the third inventory and then remanufactured or disposed of. The objective of this research is to propose a manufacturing/remanufacturing policy that would minimize the sum of the holding and backlog costs for manufacturing and remanufacturing products. The decision variables are the production rates of the manufacturing and the remanufacturing machines. The optimality conditions are developed using the optimal control theory based on stochastic dynamic programming. A computational algorithm, based on numerical methods, is used for solving the optimal control problem. Finally, a numerical example and a sensitivity analysis are presented to illustrate the usefulness of the proposed approach. The structure of the optimal control policy is discussed depending on the value of costs and parameters and extensions to more complex reverse logistics networks are discussed.

Suggested Citation

  • 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.
  • Handle: RePEc:eee:proeco:v:135:y:2012:i:1:p:81-93
    DOI: 10.1016/j.ijpe.2010.10.026
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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. Dobos, Imre, 2003. "Optimal production-inventory strategies for a HMMS-type reverse logistics system," International Journal of Production Economics, Elsevier, vol. 81(1), pages 351-360, January.
    3. Dehayem Nodem, F.I. & Kenne, J.P. & Gharbi, A., 2009. "Hierarchical decision making in production and repair/replacement planning with imperfect repairs under uncertainties," European Journal of Operational Research, Elsevier, vol. 198(1), pages 173-189, October.
    4. Salema, Maria Isabel Gomes & Barbosa-Povoa, Ana Paula & Novais, Augusto Q., 2007. "An optimization model for the design of a capacitated multi-product reverse logistics network with uncertainty," European Journal of Operational Research, Elsevier, vol. 179(3), pages 1063-1077, June.
    5. de Brito, M.P. & Flapper, S.D.P. & Dekker, R., 2002. "Reverse logistics," Econometric Institute Research Papers EI 2002-21, Erasmus University Rotterdam, Erasmus School of Economics (ESE), Econometric Institute.
    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. Song, Dong-Ping, 2009. "Production and preventive maintenance control in a stochastic manufacturing system," International Journal of Production Economics, Elsevier, vol. 119(1), pages 101-111, May.
    8. Östlin, Johan & Sundin, Erik & Björkman, Mats, 2008. "Importance of closed-loop supply chain relationships for product remanufacturing," International Journal of Production Economics, Elsevier, vol. 115(2), pages 336-348, October.
    9. Gharbi, A. & Pellerin, R. & Sadr, J., 2008. "Production rate control for stochastic remanufacturing systems," International Journal of Production Economics, Elsevier, vol. 112(1), pages 37-47, March.
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