Abstract
Although the issue of uncertain quality of used products has a central role in reverse logistics and recovery process planning, little work has been done to study the impact of the different effort and time required for the recovery of units with different quality condition on the inventory management decisions and the resulting service levels. In the present paper we examine this issue in a multi-period horizon setting to determine the optimal parameters of a (Q, s) continuous review inventory management policy. Furthermore, we quantify the increase in costs because of quality uncertainty, as well as the economic benefits of taking into account this uncertainty during recovery planning.
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