Dynamic lot sizing with product returns

Ruud Teunter, Pelin Bayindir and Wilco van den Heuvel

No EI 2005-17, Econometric Institute Research Papers from Erasmus University Rotterdam, Erasmus School of Economics (ESE), Econometric Institute

Abstract: We address the dynamic lot sizing problem for systems with product returns. The demand and return amounts are deterministic over the finite planning horizon. Demands can be satisfied by manufactured/procured new items, but also by remanufactured returned items. The objective is to determine those lot sizes for manufacturing and remanufacturing that minimize the total cost composed of holding cost for returns and serviceable products and set-ups costs. Two different set-up cost schemes are considered; there is either a joint set-up cost for manufacturing and remanufacturing (single production line) or separate set-up costs (dedicated production lines). For the joint set-up cost case, we present an exact, polynomial time dynamic programming algorithm. For both cases, we propose a number of heuristics and test them in an extensive numerical study.

Keywords: inventory management; reverse logistics (search for similar items in EconPapers)
Date: 2005-04-18
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Citations: View citations in EconPapers (8)

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