An inventory model with dependent returns and disposal cost

Abstract: Environmental legislation and customer expectations force manufactures to take back their products after use. In this paper a recovery system for a single item is studied, in which the random returns depend on the demand stream. The model is different from other works in this field by considering the effect of disposal cost at the end of the planning horizon, on the total inventory cost. The proposed model of this paper explains how to change the reorder point to maintain the optimal policy. The paper is also supported with some numerical example to demonstrate the implementation of the optimal reordering policy.

How to cite this paper

 Nikoofal, M & Husseini, S. (2010). An inventory model with dependent returns and disposal cost.International Journal of Industrial Engineering Computations , 1(1), 45-54.

Refrences

de Brito, M. P. & Van der laan, E. A. (2009). Inventory control with product returns: The impact of imperfect information. European Journal of Operational Research, 194, 85-101.

Corbacioglu, U. & Van der laan, E. (2007). Setting the holding cost rates in a two-product system with remanufacturing, International of Production Economics, 109, 185-194.

Cohen, M. A., & Pierskalla, W. P. (1980). A dynamic inventory system with recycling, Naval Research Logistics Quarterly, 27, 289-296.

Fleischmann, M., Bloemhof-Ruwaard, J. M., Dekker, R., van der Laan, E. A., van Nuenen, J. A. E. E. & van Wassenhove, L. N. (1997). Quantitative models for reverse logistics: A review, European Journal of Operational Research 103, 1-17.

Fleischman, M. & Kuik, R. (1998). On optimal inventory control with stochastic item returns, Management Report, Erasmus University Rotterdam, 21.

Fleischmann, M., & Kuik, R. (2003). An optimal inventory control with independent stochastic item returns, European journal of Operational Research, 151, 25-37.

Fleischman, M., Kuik, R., & Dekker, R. (2002). Controlling inventories with stochastic item returns: A basic model, European Journal of Operational Research, 138, 63-75.

Guide Jr., V. D. R. & Wassenhove, L. V. (2009). Managing product returns for remanufacturing, Production and Operation Management, 10, 142-155.

Inderfurth, K., (1997). Simple optimal replenishment and disposal policies for a product recovery system with lead times, OR Spektrum, 19, 111-122.

Kiesmuller, G. P., & van der laan, E. A. (2001). An inventory model with dependent product demands and returns, International Journal of Production Economics, 72, 73-87.

Lieckens K., & Vandaele, N. (2007). Reverse logistics network design with stochastic lead times, Computers & Operations Research, 34, 395-416.

Parlikad, A. K. & McFarlane, D. (2010). Value of information in product recovery decisions: A Bayesian approach. International Journal of Sustainable Engineering. DOI: 10.1080/19397030903499810.

Van der laan, E., Dekker, R. & Salomon, M. (1996), Product remanufacturing and disposal: A numerical comparison of alternative control strategies, International Journal of Production Economics, 45, 489-498.

Van der laan, E. & Salomon, M., (1997). Production planning and inventory control with remanufacturing and disposal, European Journal of Operational Research, 102, 264-278.

Yuan, X. & Cheung, K. (1998). Modelling returns of merchandise in an inventory system, OR Spektrum, 20, 147-154.