Management of returned products to a remanufacturing facility considering arrival uncertainty and priority processing

Nowadays, due to different reasons such as guarantee policies, a large proportion of products are returned to manufacturers by customers. Since this stream has potentially significant value, many firms have been motivated to get involved in recovery activities such as remanufacturing and recycling. In this article, we discuss the management of returns to maximise value from reuse activities considering the fact that returned products have different qualities and the time of their arrival is unknown. We present an acquisition policy based on grading the returned products to specify which products should be remanufactured and which should be scrapped. To obtain the optimal disposition decision, the reverse supply chain is modelled as an M/G/1 queuing system with priority discipline. Finally, the significance of the proposed model is examined using a numerical example.