Production planning and inventory control of a two-product recovery system

Abstract

Increasing attention has been paid to production and inventory management of the product recovery system where demand is satisfied through either manufacturing brand-new products or remanufacturing returns into new ones. In this work, we investigate a recovery system with two products and two respective return flows. A periodic review inventory problem is addressed on the two-product recovery system with stochastic demands and returns over a finite horizon and an approximate dynamic programming approach is proposed to obtain production and recovery decisions for both singleperiod and multi-period problem. The optimal solutions are represented by a multi-level threshold policy.