Joint control of production, remanufacturing, and disposal activities in a hybrid manufacturing–remanufacturing system

Eungab Kim, Soroush Saghafian and Mark P. Van Oyen

European Journal of Operational Research, 2013, vol. 231, issue 2, 337-348

Abstract: To generate insights into how production of new items and remanufacturing and disposal of returned products can be effectively coordinated, we develop a model of a hybrid manufacturing–remanufacturing system. Formulating the model as a Markov decision process, we investigate the structure of the optimal policy that jointly controls production, remanufacturing, and disposal decisions. Considering the average profit maximization criterion, we show that the joint optimal policy can be characterized by three monotone switching curves. Moreover, we show that there exist serviceable (i.e., as-new) and remanufacturing (i.e., returned) inventory thresholds beyond which production cannot be optimal but disposal is always optimal. We also identify conditions under which idling and disposal actions are always optimal when the system is empty. Using numerical comparisons between models with and without remanufacturing and disposal options, we generate insights into the benefit of utilizing these options. To effectively coordinate production, remanufacturing, and disposal activities, we propose a simple, implementable, and yet effective heuristic policy. Our extensive numerical results suggest that the proposed heuristic can greatly help firms to effectively coordinate their production, remanufacturing, and disposal activities and thereby reduce their operational costs.

Keywords: Remanufacturing; Return disposal; Production; Inventory; Markov decision process; Heuristic (search for similar items in EconPapers)
Date: 2013
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0377221713004712
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:ejores:v:231:y:2013:i:2:p:337-348

DOI: 10.1016/j.ejor.2013.05.052

Access Statistics for this article

European Journal of Operational Research is currently edited by Roman Slowinski, Jesus Artalejo, Jean-Charles. Billaut, Robert Dyson and Lorenzo Peccati

More articles in European Journal of Operational Research from Elsevier
Bibliographic data for series maintained by Catherine Liu ().