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On the alignment of lot sizing decisions in a remanufacturing system in the presence of random yield

Author

Listed:
  • Tobias Schulz

    (Faculty of Economics and Management, Otto-von-Guericke University Magdeburg)

  • Ivan Ferretti

    (Faculty of Economics and Management, Otto-von-Guericke University Magdeburg)

Abstract

In the area of reverse logistics, remanufacturing has been proven to be a valu- able option for product recovery. In many industries, each step of the products’ recovery is carried out in lot sizes which leads to the assumption that for each of the different recovery steps some kind of fixed costs prevail. Furthermore, holding costs can be observed for all recovery states of the returned product. Although several authors study how the different lot sizes in a remanufacturing system shall be determined, they do not consider the specificity of the remanufacturing process itself. Thus, the disassembly operations which are always neglected in former analyses are included in this contribution as a specific recovery step. In addition, the assumption of deterministic yields (number of reworkable compo- nents obtained by disassembly) is extended in this work to study the system behavior in a stochastic environment. Three different heuristic approaches are presented for this environment that differ in their degree of sophistication. The least sophisticated method ignores yield randomness and uses the expected yield fraction as certainty equivalent. As a numerical experiment shows, this method already yields fairly good results in most of the investigated problem instances in comparison to the other heuristics which incorporate yield uncertainties. How- ever, there exist instances for which the performance loss between the least and the most sophisticated heuristic amounts to more than 6%.

Suggested Citation

  • Tobias Schulz & Ivan Ferretti, 2008. "On the alignment of lot sizing decisions in a remanufacturing system in the presence of random yield," FEMM Working Papers 08034, Otto-von-Guericke University Magdeburg, Faculty of Economics and Management.
    • Handle: RePEc:mag:wpaper:08034
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    References listed on IDEAS

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    2. Tang, Ou & Grubbstrom, Robert W., 2005. "Considering stochastic lead times in a manufacturing/remanufacturing system with deterministic demands and returns," International Journal of Production Economics, Elsevier, vol. 93(1), pages 285-300, January.
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