Supply planning model for remanufacturing system in reverse logistics environment

Abstract

This paper discusses the remanufacturing process of reusable parts in reverse logistics, where the manufacturer has two alternatives for supplying parts: either ordering the required parts to external suppliers or overhauling returned products and bringing them back to 'as new' conditions. We propose a general framework for this remanufacturing environment and a mathematical model to maximize the total cost savings by optimally deciding the quantity of parts to be processed at each remanufacturing facilities, the number of purchased parts from subcontractor. The model is newly introduced and developed in the reverse logistics literatures. The model is validated through a set of experimental data reflecting practical business situation and sensitivity analyses are conducted on various parameters to gain insight into the proposed model. © 2006 Elsevier Ltd. All rights reserved.