Optimal Production-Inventory Strategies for a Reverse Logistics System

Reverse logistics is the term for logistic environments with reuse of product and materials. In these systems products can be manufactured and the returned units be remanufactured. These can be considered as new. The operation of such a system is described by the return process of used products and the disposal activity. The effectivity of a reverse logistics system can be measured by its costs. The costs are inventory holding costs, manufacturing and remanufacturing costs. We investigate two stores. The demand is satisfied from the first store, where the manufactured and remanufactured items are stored. The returned products are collected in the second store and then remanufactured. The costs of this system consist of the linear holding costs for these two stores and the convex non-decreasing manufacturing and remanufacturing costs. There is no delay between the using and return process.