Abstract
Hybrid systems that use both raw materials (manufacturing mode) and returned products (remanufacturing mode) in their production process are considered. The system consists of one facility and necessitates setup for switching from one production mode to another. Since the flow rate of returned products is limited (fixed percentage of the demand rate is considered), switching from one mode to another is unavoidable, and so production and setup scheduling becomes critical for meeting customer demand and manufacturing cost optimization. Evaluating system performance we take into account production costs (different in manufacturing and remanufacturing modes), serviceable and return inventory costs, backlog and setup costs. Analytical solutions for optimal production and setup strategies are obtained, feasibility conditions are derived, and the sensitivity of obtained results over system parameters is investigated.
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