Batch production plan for periodic demands with uncertain recycling rate in a closed-loop supply system

Abstract

Environmental issues and legislation pressures have forced the manufacturers to exert more effort in product recovery. This necessitates a production plan to take the product recovery and greenhouse gas emission into account. However, before doing so, a myth that re-using the recycled products would increase the total production cost or decrease the profit needs to be clarified. Therefore, in this study, we shall first show that a closed-loop production plan to consider both manufacture and remanufacture would be more economic and beneficial than a single activity of either manufacture or remanufacture. Second, when we conduct recycling activity in reality, how to estimate the amount of the recycled products to be re-utilized is another issue. In this study, the concept of the expected value transformed from a fuzzy recycling rate is adopted with intervals to describe its degree of uncertainty. Then, based on the periodic demands, a production plan for batch manufacture and remanufacture is proposed and analyzed in the form of a fuzzy mixed integer programming model (FMIP), such that the total costs of production cost, holding cost, emergency procurement cost, backlogging cost and the penalty for excessive carbon emission can be minimized with different degrees of satisfaction. A numerical example is presented to illustrate the validity of the model and the impact of recycling rate on the cost of such a close-loop production system for flexible applications.© Springer-Verlag Berlin Heidelberg 2014.