Heuristics with guaranteed performance bounds for a manufacturing system with product recovery
Date of Issue2013
College of Business (Nanyang Business School)
We consider a manufacturing system with product recovery. The system manufactures a new product as well as remanufactures the product from old, returned items. The items remanufactured with the returned products are as good as new and satisfy the same demand as the new item. The demand rate for the new item and the return rate for the old item are deterministic and constant. The relevant costs are the holding costs for the new item and the returned item, and the fixed setup costs for both manufacturing and remanufacturing. The objective is to determine the lot sizes and production schedule for manufacturing and remanufacturing so as to minimize the long-run average cost per unit time. We first develop a lower bound among all classes of policies for the problem. We then show that the optimal integer ratio policy for the problem obtains a solution whose cost is at most 1.5% more than the lower bound.
DRNTU::Business::Industries and labor
European journal of operational research
© 2013 Elsevier B.V. This is the author created version of a work that has been peer reviewed and accepted for publication by European Journal of Operational Research, Elsevier B.V. It incorporates referee’s comments but changes resulting from the publishing process, such as copyediting, structural formatting, may not be reflected in this document. The published version is available at: [DOI:http://dx.doi.org/10.1016/j.ejor.2013.07.006].