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Analysis of a two-echelon inventory system with returns

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  • Mitra, Subrata

Abstract

Product take-back and recovery activities have grown in recent times as a consequence of stringent government regulations and increased customer awareness of environmental pollution. Inventory management in the context of product returns has drawn the attention of many researchers. However, the inherent complexity of the system with uncertain returns makes the analysis of the system extremely difficult. So far, the literature on this type of system is mostly limited to single echelons. The few papers available in literature on multi-echelon systems with returns base their analyses on simplified assumptions such as non-existence or non-relevance of set-up and holding costs at different levels. In this paper, we relax these assumptions and consider a two-echelon system with returns under more generalized conditions. We develop a deterministic model as well as a stochastic model under continuous review for the system, and provide numerical examples for illustration.

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  • Mitra, Subrata, 2009. "Analysis of a two-echelon inventory system with returns," Omega, Elsevier, vol. 37(1), pages 106-115, February.
    • Handle: RePEc:eee:jomega:v:37:y:2009:i:1:p:106-115
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    6. Hsien-Jen Lin, 2015. "Two-echelon stochastic inventory system with returns and partial backlogging," International Journal of Systems Science, Taylor & Francis Journals, vol. 46(6), pages 966-975, April.
    7. Dobos, Imre & Gobsch, Barbara & Pakhomova, Nadezhda & Pishchulov, Grigory & Richter, Knut, 2011. "A vendor-purchaser economic lot size problem with remanufacturing and deposit," Discussion Papers 304, European University Viadrina Frankfurt (Oder), Department of Business Administration and Economics.
    8. Tseng-Fung Ho & Chi-Chung Lin & Chih-Ling Lin, 2020. "Determining the Optimal Inventory and Number of Shipments for a Two-Resource Supply Chain with Correlated Demands and Remanufacturing Products Allowing Backorder," Mathematics, MDPI, vol. 8(4), pages 1-16, April.
    9. Gumus, Alev Taskin & Guneri, Ali Fuat & Ulengin, Fusun, 2010. "A new methodology for multi-echelon inventory management in stochastic and neuro-fuzzy environments," International Journal of Production Economics, Elsevier, vol. 128(1), pages 248-260, November.
    10. Ruiz-Benítez, Rocío & Ketzenberg, Michael & van der Laan, Erwin A., 2014. "Managing consumer returns in high clockspeed industries," Omega, Elsevier, vol. 43(C), pages 54-63.
    11. Arcelus, F.J. & Kumar, Satyendra & Srinivasan, G., 2012. "The effectiveness of manufacturer vs. retailer rebates within a newsvendor framework," European Journal of Operational Research, Elsevier, vol. 219(2), pages 252-263.
    12. Schulz, Tobias & Voigt, Guido, 2014. "A flexibly structured lot sizing heuristic for a static remanufacturing system," Omega, Elsevier, vol. 44(C), pages 21-31.
    13. Tai, Allen H. & Ching, Wai-Ki, 2014. "Optimal inventory policy for a Markovian two-echelon system with returns and lateral transshipment," International Journal of Production Economics, Elsevier, vol. 151(C), pages 48-55.
    14. Bimal Kumar Mawandiya & J. K. Jha & Jitesh J. Thakkar, 2020. "Optimal production-inventory policy for closed-loop supply chain with remanufacturing under random demand and return," Operational Research, Springer, vol. 20(3), pages 1623-1664, September.
    15. Mostafa Parsa & Ali Shahandeh Nookabadi & Zümbül Atan & Yaser Malekian, 2022. "An optimal inventory policy for a multi-echelon closed-loop supply chain of postconsumer recycled content products," Operational Research, Springer, vol. 22(3), pages 1887-1938, July.
    16. Hariga, Moncer & As’ad, Rami & Khan, Zeinab, 2017. "Manufacturing-remanufacturing policies for a centralized two stage supply chain under consignment stock partnership," International Journal of Production Economics, Elsevier, vol. 183(PB), pages 362-374.
    17. Baek, Jung Woo & Bae, Yun Han, 2022. "A queuing-inventory model for manufacturing systems with fluid-type inventory," Omega, Elsevier, vol. 111(C).
    18. Govindan, Kannan & Soleimani, Hamed & Kannan, Devika, 2015. "Reverse logistics and closed-loop supply chain: A comprehensive review to explore the future," European Journal of Operational Research, Elsevier, vol. 240(3), pages 603-626.
    19. Maiti, T. & Giri, B.C., 2017. "Two-way product recovery in a closed-loop supply chain with variable markup under price and quality dependent demand," International Journal of Production Economics, Elsevier, vol. 183(PA), pages 259-272.
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    21. Gökbayrak, Esra & Kayış, Enis, 2023. "Single item periodic review inventory control with sales dependent stochastic return flows," International Journal of Production Economics, Elsevier, vol. 255(C).

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