Product acquisition management with consideration for product quality

This paper deals with product acquisition management problem with consideration for product quality under stochastic demand. We model the acquisition system with multiple product quality classes for ordering the products under remanufacturing environment. Some classes are good quality products for remanufacturing; others are not so good. When we model such a system, it should be required to consider the optimal ordering policy for the acquisition under the minimum cost criteria. We define the state of the acquisition system by the inventory levels of all the product classes. It is assumed that the cost function is composed of various cost factors such as holding, remanufacturing and acquisition costs. The system is formulated into a time average Markov Decision Process (MDP). We obtain the optimal ordering policy that minimizes the expected average cost per period. Numerical results show the effects of some factors on the optimal policy.