Lot Sizing Policies for Remanufacturing Systems

Abstract

In recent years many companies have extended the focus of their logistic processes to a closed-loop supply chain perspective in order to meet the growing environmental awareness of their customers. To analyze such systems theoretically the research field of Reverse Logistics has been established which adds to the traditional view of logistics the flow of goods coming back from the customers to the company. After receiving the products back the company can choose one from the manifold options on how to handle these products. Among others, remanufacturing has been proven to be a worthwhile option in several businesses. The process of remanufacturing begins with the disassembly of the returned products. The obtained components are afterwards cleaned and reworked until a good-as-new quality is assured. Finally, when meeting the required quality standards those components can be used in the final product assembly as a low-cost alternative to newly manufactured ones. Thus, a part of the embedded economic value of the returned products can be saved by remanufacturing. While analyzing the process of remanufacturing, a multi-level inventory system has to be evaluated in order to gain insight into the process. Since fixed as well as holding costs prevail on each system level a multi-level lot sizing problem needs to be solved which shall represent the main focus of this contribution.