The reverse Wagner/Whitin model with variable manufacturing and remanufacturing cost

In this paper, the reverse Wagner/Whitin model is extended to the case with additional variable manufacturing and remanufacturing cost. This model can be regarded as a combination of the classical Wagner/Whitin model and a pure reverse Wagner/Whitin model with given returns of used products. The combined model is more appropriate to practice, if the alternative application of remanufacturing and manufacturing processes is analysed. For the case of time-constant cost and demand data we prove the optimality of a policy starting with remanufacturing before switching to manufacturing and give an estimation for the optimal switching point. Finally, it is investigated how the disposal of excess inventory would change the solution.