Estimation-based production control of manufacturing–remanufacturing systems with uncertain seasonal return and imprecise demand and inventory

Hybrid manufacturing systems utilising raw materials and returned end-of-life products for production are studied. The systems are failure-prone and subject to inventory, market demand and return uncertainties. Thanks to growing environmental and sustainability concerns, the manufacturing sector is currently experiencing a significant growth in the popularity of reverse logistics. However, the practical implementation of production control in such systems is challenging due to return flow uncertainty and variability. To address this challenge, an estimation-based control using the Kalman filter is proposed in this research. The demand and return models employed contain random and deterministic components, with the latter being time-invariant for demand and uncertain with seasonal variations for return. The processing steps used include the estimation of inventory levels and demand and return components, return forecasting allowing cost computation over a long horizon, and the determination of the production and disposal policies adapting to market variations and uncertainties. We classify the systems according to relationships between their production capacity, demand and return ranges. We then present an extensive numerical study of optimal policies for various system classes and show that adaptive policies outperform the conventional ones, thus proving the effectiveness of the proposed production control approach for complex industrially oriented systems.