Inventory control policies for reverse logistics

Abstract

The roots of environmentalism can be traced to the period during World War II when severe material shortages occurred worldwide. As a result of these shortages, people were forced to reuse or recycle many different materials. Many organizations are now undertaking initiatives to restructure their supply chain processes and products due to several reasons. They are now extending their distribution channels beyond the end customer to include the acceptance and disassembly of final products for reuse in new products. Moreover, some organizations are seeking to “close the loop” and eventually transform used products into new products and/or materials that can be returned to the earth without harming the environment. In short, organizations are actively working to improve their “reverse logistics” functions, to manage the flow of products and services moving backward through the supply chain. Among the several forms of reuse, recycling and remanufacturing system is our concern. ‘Recycling’ denotes material recovery without conserving any production structure. ‘Remanufacturing’ conserves the product identity and seeks to bring the product back into an ‘as new’ condition by carrying out the necessary disassembly, overhaul, and replacement operations. Chapter 2 deals with the recycling system and remanufacturing system with constant demand and return rate and lead times for external orders, manufacturing and remanufacturing. Mathematical models were developed for both systems and optimal solution algorithms minimizing the total cost were proposed. Chapter 3 deals with the inventory control of a recycling system where a fixed fraction of the demand is assumed to return to the system. Inventory of the returned material is decreased by the production process as well as by deterioration following Weibull distribution during its storage. Mathematical expressions for the three kinds of inventory levels, the final product, returned material, and procured virgin raw ma...