Optimal manufacturing-remanufacturing policies in a lean production environment

Abstract

This study analyses a production-management model that considers the possibility of implementing a reverse-logistics system for remanufacturing end-of-life products in a lean production environment (as opposed to models that use EOQ approaches). Decision variables are identified (including manufacturing and remanufacturing capacities and return rates and use rates for end-oflife products) and optimal policies are determined. Moreover, the structure of these optimal policies is analysed. The conclusion drawn is that, in many realistic scenarios, mixed policies (that is, with return rates and use rates strictly between 0 and 1) can be optimal. This conclusion is contrary to results published in earlier studies, which are based on more restrictive assumptions.