A remanufacturing inventory optimization model for deteriorating items with volume flexibility

In recent decades, there has been a significant increase in interest among organizations and businesses in adopting green supply chain practices. Despite the extensive research on this topic, a notable gap exists, particularly regarding the impacts of volume flexibility, deterioration, and preservation technology costs. Volume flexibility plays a crucial role in supply chain inventory models by enhancing agility and responsiveness. This enables businesses to better align production with changing market conditions, mitigate risks, and optimize resource utilization in a cost-effective manner. The aim of this study is to address these gaps by developing optimal inventory models for items that deteriorate instantaneously, within the context of remanufacturing in a volume-flexible environment. The focus is on a scenario involving a single producer and a single retailer, incorporating one manufacturer and remanufacturer cycle followed by multiple retailer cycles. The proposed model assumes that returned used goods are collected, sent back to the manufacturer, remanufactured, and then sold alongside newly manufactured items. Key decision variables include the finite production rate, which is treated as a function of the unit production cost. The mathematical formulation of the model is accompanied by optimization procedures using the proposed algorithms. The optimal solution to the green supply chain problem is determined through a comprehensive evaluation of factors such as production rate, preservation technology investment cost, cycle time, and overall joint cost. To validate the proposed model, numerical and sensitivity analyses are conducted.