A green supply chain model of vendor and buyer for remanufacturing

Due to environmental protection and limited resource utilization at optimum level, remanufacturing of defective products or reused products is an essential strategy in green supply chain inventory control system. This paper presents a green supply chain inventory model for integrated production of new items and remanufacturing of redeemable returned items under a situation in which the vendor provides the buyer with a permissible delay of payments and supplies the serviceable items to the buyer on lot-for-lot basis. It is assumed that every member of the chain is ready to collaborate for the maximum benefit of the supply chain. A mathematical formulation is developed to derive the optimal number of deliveries and the replenishment cycle time for the integrated vendor-buyer inventory model. Theoretical results show the global optimality of the solution and it is concluded that the collaboration is profitable for the chain and participating members reach the optimal level under co-operative decision making. Numerical analysis is given to illustrate the theoretical results. Finally, a sensitivity analysis is reported to study the effect of various parameters.

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