An Inventory Model with Dependent Product Demands and Returns
Eindhoven University of Technology (TUE) - Faculty of Technology Management
E. Van der Laan
Erasmus University Rotterdam (EUR) - Department of Technology and Operations Management; Erasmus Research Institute of Management (ERIM)
27 2001 3,
ERIM Report Series Reference No. ERS-2001-16-LIS
In this paper an inventory model for a single reusable product is investigated,in which the random returns depend explicitly on the demand stream. Further,the model distinguishes itself from most other research in this field by consideringleadtimes and a finite planning horizon. We show that neglecting the dependencybetween demands and returns of products may lead to bad performance with respectto total average relevant costs. Additionally, our results enable us to determine theminimal recovery probability or the minimal length of the planning horizon forwhich reuse is profitable.
Number of Pages in PDF File: 30
Keywords: reusable products, remanufacturing, order-up-to policy, Markov Chain
JEL Classification: M, M11, R4
Date posted: February 10, 2003
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