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An inventory control problem for deteriorating items with back-ordering and financial considerations under two levels of trade credit linked to order quantity
July  2016, 12(3): 1075-1089. doi: 10.3934/jimo.2016.12.1075

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

 1 Industrial Engineering Department, College of Engineering, King Saud University, P.O Box 800, Riyadh 11421 2 King Saud University, Computer Engineering Department, College of Computer and Information Sciences, Riyadh 11421, Saudi Arabia 3 Fairleigh Dickinson University, Silberman College of Business, Department of Information Systems and Decision Sciences, 842 Cambie Street, Vancouver, BC, V6B 2P6

Received  December 2014 Revised  May 2015 Published  September 2015

In this paper, we study a reverse supply chain with three stocks for a firm implementing the periodic-review as policy. The first stock consists of newly manufactured items, while the second one is devoted to remanufactured items. The third stock contains all the items returned from the market. We made the following assumptions: items are not as-good-as-new, deterioration and dynamic demands affect new and remanufactured items, and dynamic customer return rate. Using optimal control theory, explicit expressions of the optimal rates in all three stocks have been provided: those for manufacturing, remanufacturing, disposal, and inventory levels. In the case where items deterioration rates are assumed to be unknown, self-tuning optimal control has also been implemented using the recursive least-squares method. Numerical examples and sensitivity analyses illustrate the results.
Citation: Abdelghani Bouras, Ramdane Hedjar, Lotfi Tadj. Production planning in a three-stock reverse-logistics system with deteriorating items under a periodic review policy. Journal of Industrial & Management Optimization, 2016, 12 (3) : 1075-1089. doi: 10.3934/jimo.2016.12.1075
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