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An inventory control model with consideration of remanufacturing and product life cycle

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  • Hsueh, Che-Fu

Abstract

This paper investigates inventory control policies in a manufacturing/remanufacturing system during the product life cycle, which consists of four phases: introduction, growth, maturity, and decline. Both demand rate and return rate of products are random variables with normal distribution; the mean of the distribution varies according to the time in the product life cycle. Closed-form formulas of optimal production lot size, reorder point, and safety stock in each phase of the product life cycle are derived. A numerical example is presented with sensitivity analysis. The result shows that different inventory control policies should be adopted in different phases of the product life cycle. It is also found that the optimal production lot size and reorder point are not sensitive to the phase length and the demand changing rate.

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  • Hsueh, Che-Fu, 2011. "An inventory control model with consideration of remanufacturing and product life cycle," International Journal of Production Economics, Elsevier, vol. 133(2), pages 645-652, October.
    • Handle: RePEc:eee:proeco:v:133:y:2011:i:2:p:645-652
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    3. Gan, Shu San & Pujawan, I. Nyoman & Suparno, & Widodo, Basuki, 2015. "Pricing decision model for new and remanufactured short-life cycle products with time-dependent demand," Operations Research Perspectives, Elsevier, vol. 2(C), pages 1-12.
    4. Kumar Jena, Sarat & Sarmah, S.P, 2014. "Price competition and co-operation in a duopoly closed-loop supply chain," International Journal of Production Economics, Elsevier, vol. 156(C), pages 346-360.
    5. Hallak, Bassam K. & Nasr, Walid W. & Jaber, Mohamad Y., 2021. "Re-ordering policies for inventory systems with recyclable items and stochastic demand – Outsourcing vs. in-house recycling," Omega, Elsevier, vol. 105(C).
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    7. Panda, Shibaji & Modak, Nikunja Mohan & Cárdenas-Barrón, Leopoldo Eduardo, 2017. "Coordinating a socially responsible closed-loop supply chain with product recycling," International Journal of Production Economics, Elsevier, vol. 188(C), pages 11-21.
    8. Gan, Shu-San & Pujawan, I. Nyoman & Suparno, & Widodo, Basuki, 2017. "Pricing decision for new and remanufactured product in a closed-loop supply chain with separate sales-channel," International Journal of Production Economics, Elsevier, vol. 190(C), pages 120-132.
    9. Fang, Chih-Chiang, 2020. "Optimal price and warranty decision for durable products in a competitive duopoly market," Reliability Engineering and System Safety, Elsevier, vol. 203(C).
    10. Zolfagharinia, Hossein & Hafezi, Maryam & Farahani, Reza Zanjirani & Fahimnia, Behnam, 2014. "A hybrid two-stock inventory control model for a reverse supply chain," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 67(C), pages 141-161.
    11. Samarghandi, Hamed, 2017. "Studying the impact of merged and divided storage policies on the profitability of a remanufacturing system with deteriorating revenues," International Journal of Production Economics, Elsevier, vol. 193(C), pages 160-171.
    12. František Milichovský, 2017. "An Impact of Reverse Logistics Activities on Marketing Communication," Acta Universitatis Agriculturae et Silviculturae Mendelianae Brunensis, Mendel University Press, vol. 65(2), pages 669-678.
    13. Seifert, Ralf W. & Tancrez, Jean-Sébastien & Biçer, Işık, 2016. "Dynamic product portfolio management with life cycle considerations," International Journal of Production Economics, Elsevier, vol. 171(P1), pages 71-83.
    14. Taylor, Margaret & Taylor, Andrew, 2012. "The technology life cycle: Conceptualization and managerial implications," International Journal of Production Economics, Elsevier, vol. 140(1), pages 541-553.
    15. Barros, Júlio & Cortez, Paulo & Carvalho, M. Sameiro, 2021. "A systematic literature review about dimensioning safety stock under uncertainties and risks in the procurement process," Operations Research Perspectives, Elsevier, vol. 8(C).
    16. Mabel C. Chou & Chee-Khian Sim & Xue-Ming Yuan, 2020. "Policies for inventory models with product returns forecast from past demands and past sales," Annals of Operations Research, Springer, vol. 288(1), pages 137-180, May.
    17. Sicilia, Joaquín & González-De-la-Rosa, Manuel & Febles-Acosta, Jaime & Alcaide-López-de-Pablo, David, 2014. "Optimal policy for an inventory system with power demand, backlogged shortages and production rate proportional to demand rate," International Journal of Production Economics, Elsevier, vol. 155(C), pages 163-171.
    18. Gmelin, Harald & Seuring, Stefan, 2014. "Achieving sustainable new product development by integrating product life-cycle management capabilities," International Journal of Production Economics, Elsevier, vol. 154(C), pages 166-177.
    19. 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.
    20. Gu, Wenjun & Chhajed, Dilip & Petruzzi, Nicholas C. & Yalabik, Baris, 2015. "Quality design and environmental implications of green consumerism in remanufacturing," International Journal of Production Economics, Elsevier, vol. 162(C), pages 55-69.
    21. Wu, Cheng-Han, 2012. "Price and service competition between new and remanufactured products in a two-echelon supply chain," International Journal of Production Economics, Elsevier, vol. 140(1), pages 496-507.
    22. Dong, Ming & Mao, Shunjie & Li, Shan, 2023. "Supplier's technology upgrading investment strategy considering product life cycle," International Journal of Production Economics, Elsevier, vol. 263(C).
    23. Gonçalves, João N.C. & Sameiro Carvalho, M. & Cortez, Paulo, 2020. "Operations research models and methods for safety stock determination: A review," Operations Research Perspectives, Elsevier, vol. 7(C).

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