Two-Period Inventory Control with Manufacturing and Remanufacturing under Return Compensation Policy
As an effective way of decreasing production cost, remanufacturing has attracted more and more attention from firms. However, it also brings many difficulties to firms, especial when firms remanufacture products which they produce. A primary problem for the case is how to acquire the used product so...
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| Format: | Article |
| Language: | English |
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Wiley
2013-01-01
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| Series: | Discrete Dynamics in Nature and Society |
| Online Access: | http://dx.doi.org/10.1155/2013/871286 |
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| author | Xiaochen Sun Mengmeng Wu Fei Hu |
| author_facet | Xiaochen Sun Mengmeng Wu Fei Hu |
| author_sort | Xiaochen Sun |
| collection | DOAJ |
| description | As an effective way of decreasing production cost, remanufacturing has attracted more and more attention from firms. However, it also brings many difficulties to firms, especial when firms remanufacture products which they produce. A primary problem for the case is how to acquire the used product sold by the firm itself. In this paper, we consider a return compensation policy for acquiring used product from customers. Under this policy, the return quantity of used product is a proportion of demand. We study an inventory replenishment and production planning problem for a two-period inventory system with dependent return and demand. We formulate the problem into a three-stage stochastic programming problem, where the firm needs to make decisions on the replenishment quantity of new raw material inventory in each period and the production quantities of manufacturing and remanufacturing ways. We give the optimal production policy of manufacturing and remanufacturing ways for the realized demand and prove the objective function for each stage to be concave in the inventory replenishment quantity. Moreover, we prove that the basic inventory policy is still optimal for each period and give the analytical conditions of the optimal inventory levels which are unrelated to acquisition price. Finally, we investigate numerical studies to analyze managerial insights. |
| format | Article |
| id | doaj-art-c784bc6f04e8428f8cfb659c3b1fb7e4 |
| institution | DOAJ |
| issn | 1026-0226 1607-887X |
| language | English |
| publishDate | 2013-01-01 |
| publisher | Wiley |
| record_format | Article |
| series | Discrete Dynamics in Nature and Society |
| spelling | doaj-art-c784bc6f04e8428f8cfb659c3b1fb7e42025-08-20T03:22:57ZengWileyDiscrete Dynamics in Nature and Society1026-02261607-887X2013-01-01201310.1155/2013/871286871286Two-Period Inventory Control with Manufacturing and Remanufacturing under Return Compensation PolicyXiaochen Sun0Mengmeng Wu1Fei Hu2School of Science, Tianjin University, Tianjin 300072, ChinaSchool of Science, Tianjin University, Tianjin 300072, ChinaSchool of Science, Tianjin University, Tianjin 300072, ChinaAs an effective way of decreasing production cost, remanufacturing has attracted more and more attention from firms. However, it also brings many difficulties to firms, especial when firms remanufacture products which they produce. A primary problem for the case is how to acquire the used product sold by the firm itself. In this paper, we consider a return compensation policy for acquiring used product from customers. Under this policy, the return quantity of used product is a proportion of demand. We study an inventory replenishment and production planning problem for a two-period inventory system with dependent return and demand. We formulate the problem into a three-stage stochastic programming problem, where the firm needs to make decisions on the replenishment quantity of new raw material inventory in each period and the production quantities of manufacturing and remanufacturing ways. We give the optimal production policy of manufacturing and remanufacturing ways for the realized demand and prove the objective function for each stage to be concave in the inventory replenishment quantity. Moreover, we prove that the basic inventory policy is still optimal for each period and give the analytical conditions of the optimal inventory levels which are unrelated to acquisition price. Finally, we investigate numerical studies to analyze managerial insights.http://dx.doi.org/10.1155/2013/871286 |
| spellingShingle | Xiaochen Sun Mengmeng Wu Fei Hu Two-Period Inventory Control with Manufacturing and Remanufacturing under Return Compensation Policy Discrete Dynamics in Nature and Society |
| title | Two-Period Inventory Control with Manufacturing and Remanufacturing under Return Compensation Policy |
| title_full | Two-Period Inventory Control with Manufacturing and Remanufacturing under Return Compensation Policy |
| title_fullStr | Two-Period Inventory Control with Manufacturing and Remanufacturing under Return Compensation Policy |
| title_full_unstemmed | Two-Period Inventory Control with Manufacturing and Remanufacturing under Return Compensation Policy |
| title_short | Two-Period Inventory Control with Manufacturing and Remanufacturing under Return Compensation Policy |
| title_sort | two period inventory control with manufacturing and remanufacturing under return compensation policy |
| url | http://dx.doi.org/10.1155/2013/871286 |
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