Production planning in a three-stock reverse-logistics system with deteriorating items under a continuous review policy

Abdelghani Bouras; Lotfi Tadj

doi:10.3934/jimo.2015.11.1041

Article Contents

2015, Volume 11, Issue 4: 1041-1058. Doi: 10.3934/jimo.2015.11.1041

This issue Previous Article Next Article Determining optimal price, replenishment lot size and number of shipments for an EPQ model with rework and multiple shipments

Production planning in a three-stock reverse-logistics system with deteriorating items under a continuous review policy

Abdelghani Bouras^1, and
Lotfi Tadj^2,

1.
Industrial Engineering Department, College of Engineering, King Saud University, P.O Box 800, Riyadh 11421
2.
Fairleigh Dickinson University, Silberman College of Business, Department of Information Systems and Decision Sciences, 842 Cambie Street, Vancouver, BC, V6B 2P6

Received: October 31, 2013

Revised: July 31, 2014

Published: September 2015

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Abstract

We consider in this paper a reverse supply chain with three stocks. Newly manufactured items are stored in the first stock. The second stock is reserved for remanufactured items, while the third stock contains the items that are returned from the market. One of our main assumptions is that remanufactured items are not as-good-as-new. We also assume that new and remanufactured items are subject to deterioration and to dynamic demands, that customer return rate is also dynamic, and that the firm adopts a continuous-review policy. Using optimal control theory, we obtain the explicit expressions of the optimal manufacturing rate, remanufacturing rate, disposal rate, and inventory levels in all three stocks. Numerical examples and sensitivity analyses illustrate the results obtained.

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Mathematics Subject Classification: 90B30, 49J15.

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