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Proceedings Paper

Optimal production policy for a remanufacturing system with virtual inventory cost
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Paper Abstract

This paper deals with a cost management problem of a remanufacturing system with stochastic demand. We model the system with consideration for two types of inventories. One is the actual product inventory in the factory. The other is the virtual inventory that is being used by the customer. For this virtual inventory, it should be required to consider an operational cost that we need in order to observe and check the quantity of the inventory. We call this the virtual inventory cost and model the system by including it. We define the state of the remanufacturing system by the two inventory levels. It is assumed that the cost function is composed of various cost factors such as holding, backlog and manufacturing costs. We obtain the optimal policy that minimizes the expected average cost per period. Numerical results reveal the effects of the factors on the optimal policy.

Paper Details

Date Published: 7 November 2005
PDF: 6 pages
Proc. SPIE 5997, Environmentally Conscious Manufacturing V, 59970H (7 November 2005); doi: 10.1117/12.630803
Show Author Affiliations
Kenichi Nakashima, Osaka Institute of Technology (Japan)
Surendra M. Gupta, Northeastern Univ. (United States)

Published in SPIE Proceedings Vol. 5997:
Environmentally Conscious Manufacturing V
Surendra M. Gupta, Editor(s)

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