Economic lot scheduling problem with returns

Motivated by a case study of a company that produces car parts, we study the multi-product economic lot scheduling problem for a hybrid production line with manufacturing of new products and remanufacturing of returned products. For this economic lot scheduling problem with returns, we consider policies with a common cycle time for all products, and with one manufacturing lot and one remanufacturing lot for each product during a cycle. For a given cycle time, the problem is formulated as a mixed integer linear programming problem, which provides the basis for an exact solution. The application of this model for one of the core products of the case study company indicates a 16% reduction in cost compared to the current lot scheduling policy.