A partially backlogged supply chain model for deteriorating items under reverse logistics, imperfect production/remanufacturing and inflation

Abstract

Reverse logistics increasingly conquered interest in the past decade. It consists of operations related to the reuse of products, such as the collection of products from end users and general processes such as reusing, repairing, and recycling. In this paper, a reverse logistics supply chain inventory model in an inflationary environment is developed. Production and remanufacturing rates are finite and variable. During the production (remanufacturing) process some imperfect quality products are produced (remanufactured), which are reworked after production (remanufacturing) run. Items deteriorate over time with time-varying deterioration rate. Many classical reverse logistics supply chain models are developed with constant demand rate and ignoring the shortages which are not true all the time in practical life. Therefore, in this model, it is assumed that the demand rate of the buyer is a function of on-hand inventory and selling price. Shortages are allowed only for the buyer and partially backordered with a time-dependent backlogging rate. The purpose of this study is to determine the optimal integrated reverse logistics supply chain policy. Finally, numerical examples and sensitivity analysis along with some decision-making implications are provided.