Simple Heuristics for Push and Pull Remanufacturing Policies

25 Pages Posted: 21 Dec 2004

See all articles by E. van der Laan

E. van der Laan

Erasmus University Rotterdam (EUR) - Department of Technology and Operations Management; Erasmus Research Institute of Management (ERIM)

Ruud Teunter

Erasmus University Rotterdam (EUR) - Department of Econometrics; Erasmus Research Institute of Management (ERIM)

Date Written: 29 2004, 10

Abstract

Inventory policies for joint remanufacturing and manufacturing have recently received muchattention. Most efforts, though, were related to (optimal) policy structures and numericaloptimization, rather than closed form expressions for calculating near optimal policy parameters.The focus of this paper is on the latter. We analyze an inventory system with unit product returns and demands where remanufacturing is the cheaper alternative for manufacturing. Manufacturing is also needed, however, since there are less returns than demands. The cost structure consists of setup costs, holding costs, and backorder costs. Manufacturing and remanufacturing orders have non-zero lead times. To control the system we use certain extensions of the familiar (s,Q) policy, called push and pull remanufacturing policies. For all policies we present simple, closed form formulae for approximating the optimal policyparameters under a cost minimization objective. In an extensive numerical study we showthat the proposed formulae lead to near-optimal policy parameters.

Keywords: inventory control, remanufacturing, heuristics

JEL Classification: M, M11, R4, C61

Suggested Citation

van der Laan, Erwin A. and Teunter, Ruud, Simple Heuristics for Push and Pull Remanufacturing Policies (29 2004, 10). Available at SSRN: https://ssrn.com/abstract=636799

Erwin A. Van der Laan (Contact Author)

Erasmus University Rotterdam (EUR) - Department of Technology and Operations Management ( email )

RSM Erasmus University
PO Box 1738
3000 DR Rotterdam
Netherlands

Erasmus Research Institute of Management (ERIM) ( email )

P.O. Box 1738
3000 DR Rotterdam
Netherlands

Ruud Teunter

Erasmus University Rotterdam (EUR) - Department of Econometrics ( email )

P.O. Box 1738
3000 DR Rotterdam
Netherlands
+31 1 408 1523/9162 (Phone)

Erasmus Research Institute of Management (ERIM) ( email )

P.O. Box 1738
3000 DR Rotterdam
Netherlands

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