Economic lot scheduling problem in a remanufacturing system with returns at different quality grades

Abstract An increasing number of companies and researchers have realized the value of quality grading in the remanufacturing process. In this research, we consider a lot scheduling problem for remanufacturing with returns divided into different quality grades. The remanufacturing rate increases as the quality grade increases and holding costs for serviceable products are higher than returns. The objective is to minimize the average total cost by optimizing the acquisition lot size and scheduling the remanufacturing sequence. We first schedule the remanufacturing sequence for an independent remanufacturing system, and we subsequently extend the model to a hybrid manufacturing and remanufacturing system. It is demonstrated that the given models can be applied not only to deterministic situations, where the proportion of each quality grade is constant, but also to stochastic situations, where the proportion of each quality grade is uncertain. Finally, we confirm the value of the scheduling remanufacturing sequence and analyse the sensitivity of the relevant parameters through numerical examples. The results show that the benefit of scheduling the remanufacturing sequence is to take advantage of the low holding cost for storing inexpensive returns and postponing the remanufacturing process to the time when they are needed. The value of scheduling a (re)manufacturing sequence is prominent when the quality and production rate of returns are scattered and the difference in the holding cost of products and returns is relatively large. In the hybrid manufacturing and remanufacturing system, the greater the recovery rate is, the more obvious the value of scheduling is.

[1]  Xiuli Chao,et al.  Optimal Control of Inventory Systems with Multiple Types of Remanufacturable Products , 2011, Manuf. Serv. Oper. Manag..

[2]  Lakdere Benkherouf,et al.  Optimal Control of Production, Remanufacturing and Refurbishing Activities in a Finite Planning Horizon Inventory System , 2016, J. Optim. Theory Appl..

[3]  Erik Sundin,et al.  Core (product) Acquisition Management for remanufacturing: a review , 2015 .

[4]  D. Schrady.  A deterministic inventory model for reparable items , 1967 .

[5]  S. Elmaghraby.  The Economic Lot Scheduling Problem (ELSP): Review and Extensions , 1978 .

[6]  Ilkyeong Moon,et al.  Scheduling economic lot sizes in deteriorating production systems , 2003 .

[7]  M. Jaber,et al.  The production, remanufacture and waste disposal model with lost sales , 2009 .

[8]  Christos Zikopoulos,et al.  Remanufacturing lotsizing with stochastic lead-time resulting from stochastic quality of returns , 2017, Int. J. Prod. Res..

[9]  Alcides R. Santander-Mercado,et al.  The economic lot scheduling problem: a survey , 2016 .

[10]  Ioannis Konstantaras,et al.  A note on: Developing an exact solution for an inventory system with product recovery , 2008 .

[11]  R. Teunter.  Economic ordering quantities for recoverable item inventory systems , 2001 .

[12]  Ling Lin,et al.  Assembly process control method for remanufactured parts with variable quality grades , 2016 .

[13]  Mohamad Y. Jaber,et al.  Lot sizing for a recoverable product with inspection and sorting , 2010, Comput. Ind. Eng..

[14]  Ruud H. Teunter,et al.  Economic Lot Scheduling Problem with Returns , 2006 .

[15]  Christos Zikopoulos,et al.  Joint optimization of manufacturing/remanufacturing lot sizes under imperfect information on returns quality , 2017, Eur. J. Oper. Res..

[16]  L. V. Wassenhove,et al.  MANAGING PRODUCT RETURNS FOR REMANUFACTURING , 2001 .

[17]  Paul H. Zipkin,et al.  Foundations of Inventory Management , 2000 .

[18]  Shyamal Kumar Mondal,et al.  Imperfect production inventory model with production rate dependent defective rate and advertisement dependent demand , 2017, Comput. Ind. Eng..

[19]  Erwin van der Laan,et al.  Setting the holding cost rates in a two-product system with remanufacturing , 2007 .

[20]  Simone Zanoni,et al.  Multi-product economic lot scheduling problem with manufacturing and remanufacturing using a basic period policy , 2012, Comput. Ind. Eng..

[21]  Hark Hwang,et al.  A generalized ordering and recovery policy for reusable items , 2007, Eur. J. Oper. Res..

[22]  Chun Su,et al.  Buffer allocation for hybrid manufacturing/remanufacturing system considering quality grading , 2014 .

[23]  Ou Tang,et al.  Heuristics for the economic lot scheduling problem with returns. [In special section on problems and models of inventories selected papers of the fourteenth International symposium on inventories] , 2009 .

[24]  Robert Pellerin,et al.  Production rate control for stochastic remanufacturing systems , 2008 .

[25]  Mark Ferguson,et al.  The Value of Quality Grading in Remanufacturing , 2009 .

[26]  R. Teunter,et al.  On the non-optimality of the average cost approach for inventory models with remanufacturing , 2002 .

[27]  K. Inderfurth,et al.  How to set the holding cost rates in average cost inventory models with reverse logistics , 2000 .

[28]  Ruud H. Teunter,et al.  Lot-sizing for inventory systems with product recovery , 2003, Comput. Ind. Eng..

[29]  Ilkyeong Moon,et al.  A time-varying lot sizes approach for the economic lot scheduling problem with returns , 2016 .

[30]  Robert Pellerin,et al.  A production rate control policy for stochastic repair and remanufacturing systems , 2009 .

[31]  Jack D. Rogers.  A Computational Approach to the Economic Lot Scheduling Problem , 1958 .

[32]  Tamer Boyacı,et al.  The effect of categorizing returned products in remanufacturing , 2004 .

[33]  Xiang Li,et al.  Optimal acquisition and production policy in a hybrid manufacturing/remanufacturing system with core acquisition at different quality levels , 2014, Eur. J. Oper. Res..

[34]  Ruud H. Teunter,et al.  Multi-product economic lot scheduling problem with separate production lines for manufacturing and remanufacturing , 2008, Eur. J. Oper. Res..