Production control of a deteriorated remanufacturing system within an open-reverse supply chain

Reverse supply chain management is a significant issue for sustainable economy, product recovery and green thinking. In a closed loop reverse supply chain, used products are generally returned to original producers. But in an open loop reverse supply chain, used products are not returned to original producers, outsider firms recover them. This paper focuses on an open-loop reverse supply chain (OLRSC), which includes a single centralized collection point of returned products, a single remanufacturing machine (RM) and a single distribution center. The RM produces parts, and upon a breakdown, either an imperfect repair is undertaken or is replaced with a new identical one. The objective of the control problem is to find the production rate and the repair/replacement policy that minimize total incurred costs over an infinite planning horizon. This paper proposes a stochastic dynamic programming formulation of the problem and derives the optimal policies numerically. A numerical example is included and sensitivity analyses with respect to the system parameters are examined to illustrate the importance and effectiveness of the proposed methodology.