OPTIMAL SOLUTION STRUCTURE FOR MULTI-PERIOD PRODUCTION PLANNING WITH RETURNED PRODUCTS REMANUFACTURING

Environmental legislation and customer expectations increasingly force manufacturers to take recovery of used products into account in their production and inventory management. One of the areas concerned is production planning with returned products remanufacturing. In this paper, we discuss the optimal decision for a joint manufacturing and remanufacturing system in a multi-period horizon, including manufacturing decision, remanufacturing and disposal decisions of the returned product. Setup costs are considered for the manufacturing and disposal activities. For an n-period model, we derive an optimal solution structure for the three activities, where the solution parameters can be computed by dynamic programming approach.