×

Joint control of production, remanufacturing, and disposal activities in a hybrid manufacturing-remanufacturing system. (English) Zbl 1317.90104

Summary: To generate insights into how production of new items and remanufacturing and disposal of returned products can be effectively coordinated, we develop a model of a hybrid manufacturing-remanufacturing system. Formulating the model as a Markov decision process, we investigate the structure of the optimal policy that jointly controls production, remanufacturing, and disposal decisions. Considering the average profit maximization criterion, we show that the joint optimal policy can be characterized by three monotone switching curves. Moreover, we show that there exist serviceable (i.e., as-new) and remanufacturing (i.e., returned) inventory thresholds beyond which production cannot be optimal but disposal is always optimal. We also identify conditions under which idling and disposal actions are always optimal when the system is empty. Using numerical comparisons between models with and without remanufacturing and disposal options, we generate insights into the benefit of utilizing these options. To effectively coordinate production, remanufacturing, and disposal activities, we propose a simple, implementable, and yet effective heuristic policy. Our extensive numerical results suggest that the proposed heuristic can greatly help firms to effectively coordinate their production, remanufacturing, and disposal activities and thereby reduce their operational costs.

MSC:

90B30 Production models
90C40 Markov and semi-Markov decision processes
PDFBibTeX XMLCite
Full Text: DOI

References:

[1] Bakal, I.; Akcali, E., Effects of random yield in reverse supply chains with price-sensitive supply and demand, Production and Operations Management, 15, 3, 407-420 (2006)
[2] Debo, L. G.; Toktay, L. B.; Van Wassenhove, L. N., Market segmentation and production technology selection for remanufacturable products, Management Science, 51, 8, 1193-1205 (2005)
[3] Debo, L. G.; Toktay, L. B.; Van Wassenhove, L. N., Joint life-cycle dynamics of new and remanufactured products, Production and Operations Management, 15, 4, 498-513 (2006)
[4] DeCroix, G. A., Optimal policy for a multiechelon inventory system with remanufacturing, Operations Research, 54, 532-543 (2006) · Zbl 1167.90320
[5] Ferrer, G.; Swaminathan, J. M., Managing new and remanufactured products, Management Science, 52, 1, 15-26 (2006)
[6] Ferrer, G.; Swaminathan, J. M., Managing new and differentiated remanufactured products, European Journal of Operational Research, 203, 370-379 (2010) · Zbl 1177.90125
[7] Ferguson, M. E.; Toktay, L., The effect of external competition on recovery strategies, Production and Operations Management, 15, 3, 351-368 (2006)
[8] Fleischmann, M.; Bloemhof-Ruwaard, J. M.; Dekker, R.; van der Laan, E. A.; van Nunen, Jo A. E.E.; Van Wassenhove, L. N., Quantitative models for reverse logistics: A review, European Journal of Operational Research, 103, 1-17 (1997) · Zbl 0920.90057
[10] Fleischmann, M.; Kuik, R.; Dekker, R., Controlling inventories with stochastic item returns: A basic model, European Journal of Operational Research, 138, 63-75 (2002) · Zbl 1008.90503
[11] Fleischmann, M.; Kuik, R., On optimal inventory control with independent stochastic item returns, European Journal of Operational Research, 151, 25-37 (2003) · Zbl 1033.90002
[12] Heyman, D. P., Optimal disposal policies for a single item inventory system with returns, Naval Research Logistics, 24, 385-405 (1977) · Zbl 0371.90034
[13] Guide, V. D.; Teunter, R. H.; Van Wassenhove, L. N., Matching supply and demand to maximize profits from remanufacturing, Manufacturing and Service Management, 5, 4, 303-316 (2003)
[14] Inderfurth, K., Simple optimal replenishment and disposal policies for a product recovery system with lead times, OR Spektrum, 19, 111-122 (1997) · Zbl 0889.90055
[15] Inderfurth, K.; van der Laan, E. A., Leadtime effects and policy improvement for stochastic inventory control with remanufacturing, International Journal of Production Economics, 71, 381-390 (2001)
[16] Junior, M.; Filho, M., Production planning and control for remanufacturing: Literature review and analysis, Production Planning and Control, 23, 6, 419-435 (2012)
[17] Karakayali, I.; Emir-Farinas, H.; Akcali, E., An analysis of decentralized collection and processing of end-of-life products, Journal of Operations Management, 25, 6, 1161-1183 (2007)
[18] Kaya, O., Incentive and production decisions for remanufacturing operations, European Journal of Operational Research, 201, 2, 442-453 (2010) · Zbl 1192.90056
[19] Kiesmüller, G. P.; Scherer, C. W., Computational issues in a stochastic finite horizon one product recovery inventory model, European Journal of Operational Research, 146, 553-579 (2003) · Zbl 1036.90009
[20] Li, X.; Li, Y.; Saghafian, S., A hybrid manufacturing/remanufacturing system with random remanufacturing yield and market-driven product acquisition, IEEE Transactions on Engineering Management, 60, 2, 424-437 (2013)
[21] Lippman, S., Applying a new device in the optimization of exponential queueing systems, Operations Research, 23, 687-710 (1975) · Zbl 0312.60048
[22] Mahadevan, B.; Pyke, D. F.; Fleischmann, M., Periodic review, push inventory policies for remanufacturing, European Journal of Operational Research, 151, 536-551 (2003) · Zbl 1043.90006
[23] Muckstadt, J. A.; Isaac, M. H., An analysis of single item inventory systems with returns, Naval Research Logistics, 28, 2, 237-254 (1981) · Zbl 0462.90021
[24] Porteus, E., Conditions for characterizing the structure of optimal strategies in infinite-horizon dynamic programs, Journal of Optimization Theory and Applications, 36, 419-432 (1982) · Zbl 0452.90086
[25] Puterman, M., Markov decision processes (2005), John Wiley and Sons
[27] Simpson, V., Optimal solution structure for a repairable inventory problem, Operations Research, 26, 2, 270-281 (1978) · Zbl 0377.90040
[28] Tang, O.; Teunter, R. H., Economic lot scheduling problem with returns, Production and Operations Management, 15, 488-497 (2006)
[29] Teunter, R. H.; Vlachos, D., On the necessity of a disposal option for returned items that can be remanufactured, International Journal of Production Economics, 75, 257-266 (2002)
[30] Teunter, R. H.; van der Laan, E. A.; Vlachos, D., Inventory strategies for systems with fast remanufacturing, The Journal of Operational Research Society, 55, 475-484 (2004) · Zbl 1060.90015
[31] Teunter, R. H.; Bayindir, Z. P.; van den Heuvel, W., Dynamic lot sizing with product returns and remanufacturing, International Journal of Production Research, 44, 4377-4400 (2006) · Zbl 1141.90329
[32] van der Laan, E. A.; Dekker, R.; Salomon, M., Product remanufacturing and disposal: A numerical comparison of alternative control strategies, International Journal of Production Economics, 45, 489-498 (1996)
[33] van der Laan, E. A.; Dekker, R.; Salomon, M.; Ridder, A., An \((s, Q)\) inventory model with remanufacturing and disposal, International Journal of Production Economics, 46, 339-350 (1996)
[34] van der Laan, E. A.; Salomon, M., Production planning and inventory control with remanufacturing and disposal, European Journal of Operational Research, 102, 264-278 (1997) · Zbl 0955.90018
[35] van der Laan, E. A.; Salomon, M.; Dekker, R., An investigation of lead-time effects in manufacturing/remanufacturing systems under simple PUSH and PULL control strategies, European Journal of Operational Research, 115, 195-214 (1999) · Zbl 0946.90019
[36] van der Laan, E. A.; Salomon, M.; Dekker, R.; Van Wassenhove, L., Inventory control in hybrid systems with remanufacturing, Management Science, 45, 5, 733-747 (1999) · Zbl 1231.90066
[37] van der Laan, E. A.; Teunter, R. H., Simple heuristics for push and pull remanufacturing policies, European Journal of Operational Research, 175, 2, 1084-1102 (2006) · Zbl 1142.90316
[38] Wei, C.; Li, Y.; Cai, X., Robust optimal policies of production and inventory with uncertain returns and demand, International Journal of Production Economics, 134, 357-367 (2009)
[39] Zhou, S.; Tao, Z.; Chao, X., Optimal control of inventory systems with multiple types of rernanufacturable products, Manufacturing and Service Operations Management, 13, 20-34 (2011)
This reference list is based on information provided by the publisher or from digital mathematics libraries. Its items are heuristically matched to zbMATH identifiers and may contain data conversion errors. In some cases that data have been complemented/enhanced by data from zbMATH Open. This attempts to reflect the references listed in the original paper as accurately as possible without claiming completeness or a perfect matching.