Economic lot scheduling problem in a remanufacturing system with returns at different quality grades

Abstract

An increasing number of companies and researchers have realized the value of quality grading in the remanufacturing process. In this research, we consider a lot scheduling problem for remanufacturing with returns divided into different quality grades. The remanufacturing rate increases as the quality grade increases and holding costs for serviceable products are higher than returns. The objective is to minimize the average total cost by optimizing the acquisition lot size and scheduling the remanufacturing sequence. We first schedule the remanufacturing sequence for an independent remanufacturing system, and we subsequently extend the model to a hybrid manufacturing and remanufacturing system. It is demonstrated that the given models can be applied not only to deterministic situations, where the proportion of each quality grade is constant, but also to stochastic situations, where the proportion of each quality grade is uncertain. Finally, we confirm the value of the scheduling remanufacturing sequence and analyse the sensitivity of the relevant parameters through numerical examples. The results show that the benefit of scheduling the remanufacturing sequence is to take advantage of the low holding cost for storing inexpensive returns and postponing the remanufacturing process to the time when they are needed. The value of scheduling a (re)manufacturing sequence is prominent when the quality and production rate of returns are scattered and the difference in the holding cost of products and returns is relatively large. In the hybrid manufacturing and remanufacturing system, the greater the recovery rate is, the more obvious the value of scheduling is.