Article ID: | iaor20083671 |
Country: | Netherlands |
Volume: | 175 |
Issue: | 2 |
Start Page Number: | 1084 |
End Page Number: | 1102 |
Publication Date: | Dec 2006 |
Journal: | European Journal of Operational Research |
Authors: | Teunter Ruud H., Laan Erwin A. van der |
Keywords: | inventory: order policies, heuristics |
Inventory policies for joint remanufacturing and manufacturing have recently received much attention. Most efforts, though, were related to (optimal) policy structures and numerical optimization, rather than closed form expressions for calculating near optimal policy parameters. The focus of this paper is on the latter. We analyze an inventory system with unit product returns and demands where remanufacturing is the cheaper alternative for manufacturing. Manufacturing is also needed, however, since there are less returns than demands. The cost structure consists of setup costs, holding costs, and backorder costs. Manufacturing and remanufacturing orders have non-zero lead times. To control the system we use certain extensions of the familiar (