Modeling stochastic hybrid production system regarding refurbishing and remanufacturing

Document Type : Research Paper

Authors

1 PhD Student in Industrial Engineering, Faculty of Engineering, Al-Zahra University, Tehran, Iran

2 Associate Professor, Department of Industrial Engineering, Faculty of Engineering, Alzahra University, Tehran, Iran

Abstract

This paper considers pricing and inventory control decisions simultaneously as a hybrid production system. The hybrid production system with two recovery options, remanufacturing and refurbishing are presented. The demand follows Poisson distribution, which depends on the sale price of each product. Returned products arrive according to a Poisson process. Each returned product can be remanufactured, refurbished, or disposed of. The time to manufacturing, refurbishing, and remanufacturing a product also follows an exponential distribution. By modeling the system as a Markov chain, the long-run expected profit function is derived as a function of the dispose –down-to level of returned products and the order-up-to level and the sale price of serviceable products 1 and 2. Considering pricing and inventory control decisions simultaneously with remanufacturing and refurbishing returned products creates a three-dimensional state space of the Markov Chain with dependence, the sale price of products. Due to the complexity of the model (mixed integer nonlinear programming), the Artificial Bee Colony (ABC) algorithm and complete search method are used. The results show that by increasing the purchase price of returned products, the amount of returned products will increase. If the refurbishing cost of the return products is high or the disposal cost is low, less inventory should be kept in the system with a high price of serviceable products. If the lost sale cost is high, the more inventory should be maintained. Moreover, by decreasing the price elasticity of demand, the customer’s demand is increased, and then more inventory should be kept in the system.

Keywords

References

[1]    Dekker, R., Fleischmann, M., Inderfurth, K., & van Wassenhove, L. N. (Eds.). (2013). Reverse logistics: quantitative models for closed-loop supply chains. Springer Science & Business Media.
[2]    Srivastava, S. K. (2007). Green supply‐chain management: a state‐of‐the‐art literature review, International journal of management reviews, 9(1), 53-80.
[3]    Flapper, S. D., Gayon, J. P., Lim, L. L. (2014). On the optimal control of manufacturing and remanufacturing activities with a single shared server, European Journal of Operational Research, 234(1), 86-98.
[4]    Thierry, M., Salomon, M., Van Nunen, J., Van Wassenhove, L. (1995). Strategic issues in product recovery management, California management review, 37(2), 114-136.
[5]    Zhou, Y. C., Sun, X. C. (2019). Robust optimal inventory and acquisition effort decisions in a hybrid manufacturing/remanufacturing system, Journal of Industrial and Production Engineering, 36(5), 335-350.
[6]    Simpson, V. P. (1978). Optimum solution structure for a repairable inventory problem, Operations research, 26(2), 270-281.
[7]    Fleischmann, M., Bloemhof-Ruwaard, J. M., Dekker, R., Van der Laan, E., Van Nunen, J. A., Van Wassenhove, L. N. (1997). Quantitative models for reverse logistics: A review, European journal of operational research, 103(1), 1-17.
[8]    Nobari, A., Kheirkhah, A., Esmaeili, M. (2019). Considering chain-to-chain competition on environmental and social concerns in a supply chain network design problem, International Journal of Management Science and Engineering Management, 14(1), 33-46.
[9]    Maji, A., Bhunia, A. K., Mondal, S. K. (2020). Exploring a production-inventory model with optimal reliability of the production in a parallel-series system, Journal of Industrial and Production Engineering, 37(2-3), 71-86.
[10] Inderfurth, K. (1997). Simple optimal replenishment and disposal policies for a product recovery system with leadtimes, Operations-Research-Spektrum, 19(2), 111-122.
[11] DeCroix, G. A. (2006). Optimal policy for a multiechelon inventory system with remanufacturing, Operations Research, 54(3), 532-543.
[12] Kiesmüller, G. P. (2003). A new approach for controlling a hybrid stochastic manufacturing/remanufacturing system with inventories and different leadtimes, European Journal of Operational Research, 147(1), 62-71.
[13] Ahiska, S. S., King, R. E. (2010). Inventory optimization in a one product recoverable manufacturing system, International Journal of Production Economics, 124(1), 11-19.
[14] Ahiska, S. S., King, R. E. (2010). Life cycle inventory policy characterizations for a single-product recoverable system, International Journal of Production Economics, 124(1), 51-61.
[15] Benedito, E., Corominas, A. (2013). Optimal manufacturing policy in a reverse logistic system with dependent stochastic returns and limited capacities, International Journal of Production Research, 51(1), 189-201.
[16] Zolfagharinia, H., Hafezi, M., Farahani, R. Z., Fahimnia, B. (2014). A hybrid two-stock inventory control model for a reverse supply chain, Transportation Research Part E: Logistics and Transportation Review, 67, 141-161.
[17] Heyman, D. P. (1977). Optimal disposal policies for a single‐item inventory system with returns, Naval Research Logistics Quarterly, 24(3), 385-405.
[18] Muckstadt, J. A., Isaac, M. H. (1981). An analysis of single item inventory systems with returns, Naval Research Logistics Quarterly, 28(2), 237-254.
[19] Van der Laan, E., Dekker, R., Salomon, M., Ridder, A. (1996). An (s, Q) inventory model with remanufacturing and disposal, International journal of production economics, 46, 339-350.
[20] Van der Laan, E., Dekker, R., Salomon, M. (1996). Product remanufacturing and disposal: A numerical comparison of alternative control strategies, International Journal of Production Economics, 45(1-3), 489-498.
[21] Van der Laan, E., Salomon, M. (1997). Production planning and inventory control with remanufacturing and disposal, European Journal of Operational Research, 102(2), 264-278.
[22] Takahashi, K., Doi, Y., Hirotani, D., Morikawa, K. (2014). An adaptive pull strategy for remanufacturing systems, Journal of Intelligent Manufacturing, 25(4), 629-645.
[23] Van der Laan, E., Salomon, M., Dekker, R. (1999). An investigation of lead-time effects in manufacturing/remanufacturing systems under simple PUSH and PULL control strategies, European Journal of Operational Research, 115(1), 195-214.
[24] Inderfurth, K., van der Laan, E. (2001). Leadtime effects and policy improvement for stochastic inventory control with remanufacturing, International Journal of Production Economics, 71(1-3), 381-390.
[25] Inderfurth, K. (2004). Optimal policies in hybrid manufacturing/remanufacturing systems with product substitution, International Journal of Production Economics, 90(3), 325-343.
[26] Bayındır, Z. P., Erkip, N., Güllü, R. (2005). Assessing the benefits of remanufacturing option under one-way substitution, Journal of the Operational Research Society, 56(3), 286-296.
[27] Xiong, Yu, and Gendao Li. (2013). The value of dynamic pricing for cores in remanufacturing with backorders, Journal of the Operational Research Society 64.9 1314-1326.
[28] Giri, B. C., Mondal, C., Maiti, T. (2019). Optimal product quality and pricing strategy for a two-period closed-loop supply chain with retailer variable markup, RAIRO-Operations Research, 53(2), 609-626.
[29] Xiong, Y., Li, G., Zhou, Y., Fernandes, K., Harrison, R., Xiong, Z. (2014). Dynamic pricing models for used products in remanufacturing with lost-sales and uncertain quality, International journal of production economics, 147, 678-688.
[30] Gao, C., Wang, Y., Xu, L., Liao, Y. (2015). Dynamic pricing and production control of an inventory system with remanufacturing, Mathematical Problems in Engineering, 1-8.
[31] Burer, S., Letchford, A. N. (2012). Non-convex mixed-integer nonlinear programming: A survey, Surveys in Operations Research and Management Science, 17(2), 97-106.
[32] Zhi-gang W. (2017). Modified artificial bee colony algorithm for numerical function optimization, Journal of Scientific and Engineering Research, 4(3), 37-43.
[33] Bazarra M S, Sherali H D, and Shetty C M. (2006). Nonlinear programming, theory and algorithms, 3nd Edition, New York: Wiley 
[34] Mehran Ullah, and Sarkar Biswajit  (2020). Recovery-channel selection in a hybrid manufacturing-remanufacturing production model with RFID and product quality, International Journal of Production Economics, 219,  360-374.
[35] Deng Jie, Zhang  Yajun, Tang Guofeng, and  Xu  Maozeng  (2020). Hybrid differential artificial bee colony algorithm for multi-item replenishment-distribution problem with stochastic lead-time and demands, Journal of Cleaner Production, 254, 360-
[36] رنجبر یحیی، صاحبی هادی، (1398)، قیمت‌گذاری و جمع‌آوری محصولات در زنجیره تأمین حلقه بسته با دو کانال بازیافت رقابتی تحت رهبری مختلف، پژوهش‌های مهندسی صنایع در سیستم‌های تولیدی، دوره 7، شماره 15، صفحه 377-393.
شفیعی رودباری عرفان، فاطمی قمی سید محمدتقی، شیخ سجادیه محسن، (1399)، مدل‌سازی ‌شبکه زنجیره‌تأمین معکوس چند رده‌ای و حل توسط الگوریتم ترکیبی، پژوهش‌های مهندسی صنایع در سیستم‌های تولیدی، دوره 7، شماره 5، صفحه 377-393 .
Journal of Industrial Engineering Research in Production Systems
Volume 8, Issue 17
March 2021
Pages 399-421

Files

Share

How to cite

Statistics