Optimal production policies for reverse logistic model under time value of money

Abstract

One of the important dimensions of environmental protection is the reuse and/or recycling of the items that are returned by the customers for various reasons. Such recycling and reuse prevents the flow of these unusable items into the environment and as such prevents environmental degradation. This paper deals with reverse logistic production inventory model in inflationary conditions and permissible delay in payment over finite planning horizon. The demand rate is a function of on hand inventory, production rate is a linear function of demand and thus nonlinear function of on hand inventory, items are returnable and returnable items are remanufactured. The proposed model considers the two systems simultaneously forward manufacturing system and reverses manufacturing system and derives the optimal production policy. The effects of various parameters involved are discussed. The results are discussed with a numerical example to illustrate the theory and particular cases of the model are discussed in brief.