American Institute of Mathematical Sciences

October  2015, 11(4): 1041-1058. doi: 10.3934/jimo.2015.11.1041

Production planning in a three-stock reverse-logistics system with deteriorating items under a continuous review policy

 1 Industrial Engineering Department, College of Engineering, King Saud University, P.O Box 800, Riyadh 11421, Saudi Arabia 2 Fairleigh Dickinson University, Silberman College of Business, Department of Information Systems and Decision Sciences, 842 Cambie Street, Vancouver, BC, V6B 2P6, Canada

Received  November 2013 Revised  August 2014 Published  March 2015

We consider in this paper a reverse supply chain with three stocks. Newly manufactured items are stored in the first stock. The second stock is reserved for remanufactured items, while the third stock contains the items that are returned from the market. One of our main assumptions is that remanufactured items are not as-good-as-new. We also assume that new and remanufactured items are subject to deterioration and to dynamic demands, that customer return rate is also dynamic, and that the firm adopts a continuous-review policy. Using optimal control theory, we obtain the explicit expressions of the optimal manufacturing rate, remanufacturing rate, disposal rate, and inventory levels in all three stocks. Numerical examples and sensitivity analyses illustrate the results obtained.
Citation: Abdelghani Bouras, Lotfi Tadj. Production planning in a three-stock reverse-logistics system with deteriorating items under a continuous review policy. Journal of Industrial & Management Optimization, 2015, 11 (4) : 1041-1058. doi: 10.3934/jimo.2015.11.1041
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