| Article ID: | iaor200969070 |
| Country: | United Kingdom |
| Volume: | 5 |
| Issue: | 6 |
| Start Page Number: | 758 |
| End Page Number: | 773 |
| Publication Date: | Jun 2009 |
| Journal: | International Journal of Services and Operations Management |
| Authors: | Hwang Hark, Ko Chang Seong, Ko Young Dae, Yune Sang Hun |
| Keywords: | inventory, quality & reliability |
This paper deals with a closed-loop recycling system in which a stationary demand is satisfied by remanufactured products as well as newly manufactured products. In this system, only those used products that satisfy a minimum allowed quality level are bought back from customers for recycling. Thus the collection rate of used products is expressed as a function of the quality level and the unit bought-back price. It is assumed that the cycle consists of a single remanufacturing run and a single manufacturing run, both in Economic Production Quantity settings. Treating the quality of recycled products as a random variable, we develop a mathematical model with the objective of minimising the production and inventory costs. The decision variables are the length of the cycle, the minimum allowed quality level and the unit bought-back price of used products. To illustrate the validity of the model, sample problems are solved.