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Optimal production-inventory policy for closed-loop supply chain with remanufacturing under random demand and return

Author

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  • Bimal Kumar Mawandiya

    (Nirma University)

  • J. K. Jha

    (Indian Institute of Technology Kharagpur)

  • Jitesh J. Thakkar

    (Indian Institute of Technology Kharagpur)

Abstract

This paper presents a centralized production-inventory model for an infinite planning horizon of a two-echelon closed-loop supply chain (CLSC) consisting a retailer, manufacturer, and remanufacturer. The demand at the retailer is satisfied through the new and remanufactured products received from the manufacturer and remanufacturer, respectively. The proposed model considers demand at the retailer and return at the remanufacturer as random. The manufacturer and remanufacturer produce the products at a finite rate, and they deliver to the retailer alternatively in multiple batches. An algorithm is developed to find the optimal-lot sizing and shipment policies of each entity of the CLSC by minimizing the expected joint total cost of the system. The results show that the CLSC is more profitable than the forward supply chain when the remanufacturing cost of the returned product is significantly low compared to the manufacturing cost of the new product, the demand variation at the retailer is low, and the fraction of demand returned is close to 1.

Suggested Citation

  • Bimal Kumar Mawandiya & J. K. Jha & Jitesh J. Thakkar, 2020. "Optimal production-inventory policy for closed-loop supply chain with remanufacturing under random demand and return," Operational Research, Springer, vol. 20(3), pages 1623-1664, September.
    • Handle: RePEc:spr:operea:v:20:y:2020:i:3:d:10.1007_s12351-018-0398-x
    DOI: 10.1007/s12351-018-0398-x
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    2. Mostafa Parsa & Ali Shahandeh Nookabadi & Zümbül Atan & Yaser Malekian, 2022. "An optimal inventory policy for a multi-echelon closed-loop supply chain of postconsumer recycled content products," Operational Research, Springer, vol. 22(3), pages 1887-1938, July.
    3. Y. Sarada & S. Sangeetha, 2022. "Coordinating a reverse supply chain with price and warranty dependent random demand under collection uncertainties," Operational Research, Springer, vol. 22(4), pages 4119-4158, September.
    4. Lingli Shu & Xuedong Liang & Jingyuan Yao & Peng Luo, 2023. "Price Optimization of Closed-loop Supply Chain With Uncertain Demand Under Multi-channel Cross Influence," SAGE Open, , vol. 13(4), pages 21582440231, December.
    5. Seyed Babak Ebrahimi & Ehsan Bagheri, 2022. "A multi-objective formulation for the closed-loop plastic supply chain under uncertainty," Operational Research, Springer, vol. 22(5), pages 4725-4768, November.
    6. Yang Hu, 2023. "Perspectives in closed-loop supply chains network design considering risk and uncertainty factors," Papers 2306.04819, arXiv.org.

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