Lot-sizing for production planning in a recovery system with returns

Abstract

This paper deals with the production planning and control problem of a single product involving combined manufacturing and remanufacturing operations. We investigate here a lot-sizing problem in which the demand for items can be satisfied by both the new and the remanufactured products. We assume that produced and recovered items are of the same quality. Two types of inventories are involved in this problem. The produced items are stored in the first inventory. The returned products are collected in the second inventory and then remanufactured. The objective of this study is to propose a manufacturing/remanufacturing policy that would minimize the holding, the set up and preparation costs. The decision variables are the manufacturing and the remanufacturing rates. The paper proposes an extension of the reverse Wagner/Whitin dynamic production planning and inventory control model, a Memetic Algorithm (MA) and a Hybrid Algorithm (HA). The HA was improved with a post-optimization procedure using Path Relinking. Numerical experiments were conducted on a set of 300 instances with up to 48 periods. The results show that both methods give high-quality solutions in moderate computational time.