Production and quality control of Hybrid Manufacturing Remanufacturing System with stochastic return

This paper proposes a simulation-based optimization model addressing production and quality control in Hybrid Manufacturing Remanufacturing Systems (HMRS). Specifically, the challenging issue, in the remanufacturing context, of quality control under the stochastic nature of product returns is addressed. Experiments are conducted to measure the effect of the return rate variability on the system performances. The main finding is that when this variability is low, the impact of return rate uncertainty on the system performances remains minor. Hence investing in the costly market-driven product acquisition approach may be useless for a company which is not confronted to high variability in product returns. However, results showed that, when this return rate variability increases the critical stock level and optimal quality control changed considerably. Consequently, for a company that experiences such variability, acquiring returned products through the classic waste stream system may result in considerable increase of the total production cost.