Dynamic lot sizing with time-varying demand and return rates for a product life cycle

Abstract

In this paper, we propose dynamic lot sizing policies for a hybrid manufacturing and remanufacturing system in according with product life cycle. Demand rate and return rate are time-varying over the finite production horizon. Customer demand can be satisfied by new products or remanufactured products. The main objective is to minimize total cost of full product life cycle by optimizing the manufacturing and remanufacturing lot sizes. Optimal manufacturing and remanufacturing lot sizing policies in each phase are derived. Numerical results show that the remanufacturing activities replace manufacturing activities gradually with returns increases. The frequency of manufacturing in maturity phase is more than in introduction phase, whereas the frequency of remanufacturing in maturity phase is less than in decline phase. Therefore, the remanufacturing enterprise needs to determine its lot sizing policy based on the life stages of product.