Capacitated Remanufacturing Inventory Model Considering Backorder: A Case Study of Indonesian Reverse Logistics

This paper develops the remanufacturing inventory model considering the storage capacity. The suggested model aims to minimize the total inventory cost (TIC). The model used the EOQ model, one of the basic inventory models in the supply chain. Numerical experiments and sensitivity analyses were carried out on models developed using the Lagrangean method. The existence of constraints in storage capacity can produce an optimal quantity of remanufacturing while minimizing inventory costs. This study also indicates that there is an impact between warehouse capacity, number of cycles, backorder costs, and the level of product collection on total inventory costs, and provides management implications that companies can make appropriate policies to minimize total inventory cost.