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

K. 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

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

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  • 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.