Optimal Control of Inventory Systems with Multiple Types of Remanufacturable Products
Product returns have become a significant feature of many manufacturing systems. Because products are returned under different operational conditions, they usually require different remanufacturing effort/costs. Motivated by a project with a major energy company that manages its inventory through options of ordering and remanufacturing returned products (cores) in various condition, in this paper, we study a single-product, periodic-review inventory system with multiple types of cores. The serviceable products used to fulfill stochastic customer demand can be either manufactured from new parts or remanufactured from the cores, and the objective is to minimize the expected total discounted cost over a finite planning horizon. We show that the optimal manufacturing-remanufacturing-disposal policy has a simple structure and can be completely characterized by a sequence of constant control parameters when manufacturing and remanufacturing leadtimes are the same. To demonstrate the value of the optimal policy, we conduct a numerical study that compares its performance with two simple heuristics, namely, pull policy without and with sorting. The results show that the reduction in system cost by using the optimal policy can be significant. When manufacturing and remanufacturing leadtimes are different, we develop a heuristic method for computing the near-optimal control policy that performs quite well as demonstrated numerically.
Volume (Year): 13 (2011)
Issue (Month): 1 (March)
|Contact details of provider:|| Postal: 7240 Parkway Drive, Suite 300, Hanover, MD 21076 USA|
Web page: http://www.informs.org/
More information through EDIRC
When requesting a correction, please mention this item's handle: RePEc:inm:ormsom:v:13:y:2011:i:1:p:20-34. 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: (Mirko Janc)
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 references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link 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 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.