Optimal cost control policy for product recovery in closed-loop supply chains

Kenichi Nakashima, A. P.S. Loomba

Research output: Chapter in Book/Report/Conference proceedingConference contribution

Abstract

A good closed-loop supply chain program can be a differentiator and offer a means of gaining market advantage. From an macro-level perspective, a value chain strategy for an organization or industries includes closed-loop supply chains in which reverse chain activities (reuse, repair, refurbishing, recycling, remanufacturing, or redesign of returned products from the end user) and effective reserve chain operations may create additional competitive advantages for the firm. This paper deals with cost management problem of a remanufacturing system with stochastic variability such as demand. We model the system with consideration for production and ordering quantity as a time average Markov Decision Process (MDP). It is assumed that the cost function is composed of various cost factors such as holding, backlog and some kinds of manufacturing costs etc. We obtain the optimal production and ordering policy that minimizes the expected average cost per period. Numerical results show the implementation of the methodology.

Original languageEnglish
Title of host publication21st International Conference on Production Research
Subtitle of host publicationInnovation in Product and Production, ICPR 2011 - Conference Proceedings
EditorsTobias Krause, Dieter Spath, Rolf Ilg
PublisherFraunhofer-Verlag
ISBN (Electronic)9783839602935
Publication statusPublished - 2011 Jan 1
Externally publishedYes
Event21st International Conference on Production Research: Innovation in Product and Production, ICPR 2011 - Stuttgart, Germany
Duration: 2011 Jul 312011 Aug 4

Publication series

Name21st International Conference on Production Research: Innovation in Product and Production, ICPR 2011 - Conference Proceedings

Other

Other21st International Conference on Production Research: Innovation in Product and Production, ICPR 2011
CountryGermany
CityStuttgart
Period11/7/3111/8/4

Fingerprint

Supply chains
Recovery
Costs
Cost functions
Macros
Recycling
Repair
Industry

Keywords

  • Closed loop supply chain
  • Cost minimization
  • Optimal control policy
  • Remanufacturing system

ASJC Scopus subject areas

  • Control and Systems Engineering
  • Computer Science Applications
  • Industrial and Manufacturing Engineering

Cite this

Nakashima, K., & Loomba, A. P. S. (2011). Optimal cost control policy for product recovery in closed-loop supply chains. In T. Krause, D. Spath, & R. Ilg (Eds.), 21st International Conference on Production Research: Innovation in Product and Production, ICPR 2011 - Conference Proceedings (21st International Conference on Production Research: Innovation in Product and Production, ICPR 2011 - Conference Proceedings). Fraunhofer-Verlag.

Optimal cost control policy for product recovery in closed-loop supply chains. / Nakashima, Kenichi; Loomba, A. P.S.

21st International Conference on Production Research: Innovation in Product and Production, ICPR 2011 - Conference Proceedings. ed. / Tobias Krause; Dieter Spath; Rolf Ilg. Fraunhofer-Verlag, 2011. (21st International Conference on Production Research: Innovation in Product and Production, ICPR 2011 - Conference Proceedings).

Research output: Chapter in Book/Report/Conference proceedingConference contribution

Nakashima, K & Loomba, APS 2011, Optimal cost control policy for product recovery in closed-loop supply chains. in T Krause, D Spath & R Ilg (eds), 21st International Conference on Production Research: Innovation in Product and Production, ICPR 2011 - Conference Proceedings. 21st International Conference on Production Research: Innovation in Product and Production, ICPR 2011 - Conference Proceedings, Fraunhofer-Verlag, 21st International Conference on Production Research: Innovation in Product and Production, ICPR 2011, Stuttgart, Germany, 11/7/31.
Nakashima K, Loomba APS. Optimal cost control policy for product recovery in closed-loop supply chains. In Krause T, Spath D, Ilg R, editors, 21st International Conference on Production Research: Innovation in Product and Production, ICPR 2011 - Conference Proceedings. Fraunhofer-Verlag. 2011. (21st International Conference on Production Research: Innovation in Product and Production, ICPR 2011 - Conference Proceedings).
Nakashima, Kenichi ; Loomba, A. P.S. / Optimal cost control policy for product recovery in closed-loop supply chains. 21st International Conference on Production Research: Innovation in Product and Production, ICPR 2011 - Conference Proceedings. editor / Tobias Krause ; Dieter Spath ; Rolf Ilg. Fraunhofer-Verlag, 2011. (21st International Conference on Production Research: Innovation in Product and Production, ICPR 2011 - Conference Proceedings).
@inproceedings{4328576dc34e49c48c26e01245bf3c04,
title = "Optimal cost control policy for product recovery in closed-loop supply chains",
abstract = "A good closed-loop supply chain program can be a differentiator and offer a means of gaining market advantage. From an macro-level perspective, a value chain strategy for an organization or industries includes closed-loop supply chains in which reverse chain activities (reuse, repair, refurbishing, recycling, remanufacturing, or redesign of returned products from the end user) and effective reserve chain operations may create additional competitive advantages for the firm. This paper deals with cost management problem of a remanufacturing system with stochastic variability such as demand. We model the system with consideration for production and ordering quantity as a time average Markov Decision Process (MDP). It is assumed that the cost function is composed of various cost factors such as holding, backlog and some kinds of manufacturing costs etc. We obtain the optimal production and ordering policy that minimizes the expected average cost per period. Numerical results show the implementation of the methodology.",
keywords = "Closed loop supply chain, Cost minimization, Optimal control policy, Remanufacturing system",
author = "Kenichi Nakashima and Loomba, {A. P.S.}",
year = "2011",
month = "1",
day = "1",
language = "English",
series = "21st International Conference on Production Research: Innovation in Product and Production, ICPR 2011 - Conference Proceedings",
publisher = "Fraunhofer-Verlag",
editor = "Tobias Krause and Dieter Spath and Rolf Ilg",
booktitle = "21st International Conference on Production Research",

}

TY - GEN

T1 - Optimal cost control policy for product recovery in closed-loop supply chains

AU - Nakashima, Kenichi

AU - Loomba, A. P.S.

PY - 2011/1/1

Y1 - 2011/1/1

N2 - A good closed-loop supply chain program can be a differentiator and offer a means of gaining market advantage. From an macro-level perspective, a value chain strategy for an organization or industries includes closed-loop supply chains in which reverse chain activities (reuse, repair, refurbishing, recycling, remanufacturing, or redesign of returned products from the end user) and effective reserve chain operations may create additional competitive advantages for the firm. This paper deals with cost management problem of a remanufacturing system with stochastic variability such as demand. We model the system with consideration for production and ordering quantity as a time average Markov Decision Process (MDP). It is assumed that the cost function is composed of various cost factors such as holding, backlog and some kinds of manufacturing costs etc. We obtain the optimal production and ordering policy that minimizes the expected average cost per period. Numerical results show the implementation of the methodology.

AB - A good closed-loop supply chain program can be a differentiator and offer a means of gaining market advantage. From an macro-level perspective, a value chain strategy for an organization or industries includes closed-loop supply chains in which reverse chain activities (reuse, repair, refurbishing, recycling, remanufacturing, or redesign of returned products from the end user) and effective reserve chain operations may create additional competitive advantages for the firm. This paper deals with cost management problem of a remanufacturing system with stochastic variability such as demand. We model the system with consideration for production and ordering quantity as a time average Markov Decision Process (MDP). It is assumed that the cost function is composed of various cost factors such as holding, backlog and some kinds of manufacturing costs etc. We obtain the optimal production and ordering policy that minimizes the expected average cost per period. Numerical results show the implementation of the methodology.

KW - Closed loop supply chain

KW - Cost minimization

KW - Optimal control policy

KW - Remanufacturing system

UR - http://www.scopus.com/inward/record.url?scp=84923412701&partnerID=8YFLogxK

UR - http://www.scopus.com/inward/citedby.url?scp=84923412701&partnerID=8YFLogxK

M3 - Conference contribution

T3 - 21st International Conference on Production Research: Innovation in Product and Production, ICPR 2011 - Conference Proceedings

BT - 21st International Conference on Production Research

A2 - Krause, Tobias

A2 - Spath, Dieter

A2 - Ilg, Rolf

PB - Fraunhofer-Verlag

ER -