Optimization of Inventory for Two Level Multiple Retailers-Single Manufacturer Reverse Supply Chain

Abstract

This paper deals with modelling of deteriorating used products inventory in a two level reverse supply chain. A time dependent optimisation model is developed for multi-retailer single manufacturer reverse supply chain involving collection and disposal of used products from customers. Collection rate or supply is assumed to exponential with time and time dependent deterioration of items is considered. Two cases are presented with one on decentralised policy optimizing retailers and manufacturer’s cost separately and another on centralised policy optimizing system wide cost. The optimal collection and disposal cycle times are derived and discussed with numerical example. The model has potential to be used in industries where existing distribution system is used for end-of life products collection and disposal.