Abstract
In this work the influence of production and capacity planning on decisions regarding facility location, distribution quantities and component remanufacturing (and vice versa) in a closed-loop supply chain network (CLSCN) with multiple make-to-order products is studied. A mathematical model, the facility location, capacity and aggregate production planning with remanufacturing (FLCAPPR) model, for designing the CLSCN, for planning capacities at the facilities and for structuring the production and distribution system of the network cost-optimally, is formulated. It consists of a facility location model with component remanufacturing over multiple time periods, which is extended by capacity and production planning on an aggregate level. The problem is solved for an example set of data which is based on previous CLSC research in the copier industry. In a numerical study the effect of the extended planning approach on the decision to process returned products is determined. Furthermore, the FLCAPPR model is solved for different returned product quantities and numbers of periods in the planning horizon to study the influence on the network design and on the procuring, production and distribution quantities. It turns out that decisions regarding the locations of and the capacity equipment at facilities and decisions regarding the production and distribution system are interdependent; therefore, they have to be managed jointly. Furthermore, it is shown that the decision to process returned products and use remanufactured components in the production does depend not only on the costs, but also on the quantity of returned products and the length of the planning horizon.
Highlights
Chains with product recovery differ, depending on the characteristics of the product, the recovery activity which is used and whether this activity is done by the original equipment manufacturer or a third party [6]
In this work the influence of production and capacity planning on decisions regarding facility location, distribution quantities and component remanufacturing in a closed-loop supply chain network (CLSCN) with multiple make-to-order products is studied
A mathematical model, the facility location, capacity and aggregate production planning with remanufacturing (FLCAPPR) model, for designing the CLSCN, for planning capacities at the facilities and for structuring the production and distribution system of the network cost-optimally, is formulated. It consists of a facility location model with component remanufacturing over multiple time periods, which is extended by capacity and production planning on an aggregate level
Summary
Chains with product recovery differ, depending on the characteristics of the product, the recovery activity which is used and whether this activity is done by the original equipment manufacturer or a third party [6]. Supply chains with product recovery can be distinguished into open-loop and closed-loop supply chains (CLSC). If there is hardly any connection of the forward and return product flows, the supply chain is open-loop and the forward and reverse product flows are managed separately. If the forward and return product flows are related, e.g. customers supply their used products as production inputs, the supply chain is closedloop. In this case, often an integrated management of both flows is necessary to achieve an optimized CLSC; for further details see [8, 9]. A supply chain is studied which is closed by component remanufacturing.
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