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Control of a production–inventory system with returns under imperfect advance return information

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  • Flapper, S.D.P.
  • Gayon, J.P.
  • Vercraene, S.

Abstract

We consider a production–inventory system with product returns that are announced in advance by the customers. Demands and announcements of returns occur according to independent Poisson processes. An announced return is either actually returned or cancelled after a random return lead time. We consider both lost sale and backorder situations. Using a Markov decision formulation, the optimal production policy, with respect to the discounted cost over an infinite horizon, is characterized for situations with and without advance return information. We give insights in the potential value of this information. Also some attention is paid to combining advance return and advance demand information. Further applications of the model as well as topics for further research are indicated.

Suggested Citation

  • Flapper, S.D.P. & Gayon, J.P. & Vercraene, S., 2012. "Control of a production–inventory system with returns under imperfect advance return information," European Journal of Operational Research, Elsevier, vol. 218(2), pages 392-400.
    • Handle: RePEc:eee:ejores:v:218:y:2012:i:2:p:392-400
    DOI: 10.1016/j.ejor.2011.10.051
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    1. Francis de Véricourt & Fikri Karaesmen & Yves Dallery, 2002. "Optimal Stock Allocation for a Capacitated Supply System," Management Science, INFORMS, vol. 48(11), pages 1486-1501, November.
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    3. de Brito, Marisa P. & van der Laan, Erwin A., 2009. "Inventory control with product returns: The impact of imperfect information," European Journal of Operational Research, Elsevier, vol. 194(1), pages 85-101, April.
    4. Jean-Philippe Gayon & Saif Benjaafar & Francis de Véricourt, 2009. "Using Imperfect Advance Demand Information in Production-Inventory Systems with Multiple Customer Classes," Manufacturing & Service Operations Management, INFORMS, vol. 11(1), pages 128-143, July.
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    4. Hanukov, Gabi & Avinadav, Tal & Chernonog, Tatyana & Yechiali, Uri, 2020. "A service system with perishable products where customers are either fastidious or strategic," International Journal of Production Economics, Elsevier, vol. 228(C).
    5. Hosoda, Takamichi & Disney, Stephen M. & Gavirneni, Srinagesh, 2015. "The impact of information sharing, random yield, correlation, and lead times in closed loop supply chains," European Journal of Operational Research, Elsevier, vol. 246(3), pages 827-836.
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    8. Syed Mithun Ali & Asraf Arafin & Md. Abdul Moktadir & Towfique Rahman & Nuzhat Zahan, 2018. "Barriers to Reverse Logistics in the Computer Supply Chain Using Interpretive Structural Model," Global Journal of Flexible Systems Management, Springer;Global Institute of Flexible Systems Management, vol. 19(1), pages 53-68, March.
    9. Zhang, Qiao & Chen, Jing & Chen, Bintong, 2021. "Information strategy in a supply chain under asymmetric customer returns information," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 155(C).
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