Abstract
The implementation of scrap recovery activities has been shown to improve the financial performance of many firms, and this kind of circular economy (CE) is particularly evident in industries with green manufacturing (GM). In this paper, we consider an imperfect multiple-stage production system that manufactures paired products made from mixed materials containing scrap returns, in which the scrap returns are converted from defective products. The feed rates of scrap returns for two products are different, and the product with the higher feed rate is placed in the second order of the process to avoid unlimited accumulation of scrap returns. The proposed problem is formulated as a joint economic order quantity (EOQ) and economic production quantity (EPQ) model aimed at cost minimization. The decision variables of the proposed model include the production run time of two products, order quantity of new material, and the extent of investment in converted equipment. We also prove that the optimal solution exists uniquely and provide an algorithm for the computation of the optimal solution. Finally, a numerical example involving the pulp and paper manufacturing industry is provided to illustrate the solution process, and the results of its sensitivity analysis are also presented to show some managerial implications.
Highlights
The proposed model explored the practicality of a production–inventory model with paired products mixed materials containing scrap returns in an imperfect production system
It aimed to clearly determine the production run time of both finished products, order quantity of material, and the investment capital in converted equipment to minimize the total cost per unit time
Improving production cost can effectively reduce the total cost per unit time, for example, a 34.6177% reduction in the total cost can be achieved if the unit production cost of the finished product is reduced by half
Summary
Publisher’s Note: MDPI stays neutral with regard to jurisdictional claims in published maps and institutional affiliations. In metal and plastic products manufacturing industries, the defective products can be converted into secondary raw materials by the melting process This gap in the research motivated us to study an inner CE model capable of accounting for another method of disposal for defective products when discussing the issue of the imperfect production–inventory problem. Section concludes this paper and gives some future research directions
Sign-in/Register to view highlights & summary Sign-in/Register to access full text options 
Free) 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a call
