Dynamic routing in distinguishable parallel queues: an application of product returns for remanufacturing

This paper deals with the dynamic routing of product returns in distinguishable parallel queues. Several vendors alongside an original equipment manufacturer are available in provision of remanufacturing service. Each has its own queue. The stream of the product returns follow a stochastic process. A central controller is employed to decide to which vendor an incoming product is sent to avoid excessive queues in front of some vendors and idle servers in the others. We develop models and index‐based heuristics to support the dynamic routing decisions so as to minimize the overall recovering costs. The product concerned exemplifies a short‐life cycle due to, for example, technology advance. Long delay during the remanufacturing process will render a substantial deterioration of reselling prices. Hence, in the paper we contend that the cost incurred for remanufacturing a product should take explicit account of the impact of long delays in the lead time. Both theoretical and simulation studies demonstrate the effectiveness of the Restless Bandit approach deployed to the dynamic routing of product returns among multiple vendors.