Optimal Acquisition and Sorting Policies for Remanufacturing over single and Multiple Periods

• Main Author: Lu, Yihao
• Format: Others
• Published: ScholarWorks@UMass Amherst 2009
• Subjects: Operations research
• Online Access: https://scholarworks.umass.edu/theses/240; https://scholarworks.umass.edu/cgi/viewcontent.cgi?article=1300&context=theses

The remanufacturing industry emerged as many countries and increasing number of environmentally conscious consumers come to realize the natural resources depletion and widely spread pollution. While commonly believed as a compromise to the strict government regulations, remanufacturing is actually becoming a profitable business model. Moreover, researchers have found that it may increase market share under right circumstances. In this thesis, we study one major problem in remanufacturing, namely, sorting policies that specify which returned items should be remanufactured and which should be scrapped. We examine a remanufacturer who acquires used products from third party brokers or directly from the market in both single and multiple periods. In single period setting, we examine the optimal policies when the acquisition cost is piecewise linear convex as well as linear. We show that a simple sorting policy exists when the acquisition cost is linear. We study the multi-period problem and prove that the unique optimal policies in multiple periods exist. While the remanufacturer may decide to keep inventory for final products only or he may decide to keep inventory for raw cores as well, we illustrate the algorithm to solve the optimization problem. For linear acquisition cost problems in both single and multiple period problems, we show that they can be solved as general inventory problems which may include setup costs, backlogging and uncertain demand.