• Scenario-based two-stage stochastic programming for a Hybrid Manufacturing-Remanufacturing System with the uncertainty of returns, quality and demand

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      https://www.ias.ac.in/article/fulltext/sadh/046/0059

    • Keywords

       

      Capacity investment; inventory planning; remanufacturing; two-stage stochastic programming; scenario-based approach.

    • Abstract

       

      This paper addresses the optimization of make-to-order hybrid manufacturing - remanufacturing system to make capacity and inventory decisions jointly along with production decisions. The proposed system considers a common production facility and the same assembly/disassembly line to perform manufacturing andremanufacturing operations simultaneously. The current study takes into account an environment where new and remanufactured (reman) products competing to each other that is, the common demand stream for both products but different selling prices. Furthermore, the relative capacity consumed by remanufacturing over the manufacturing is explained in two ways, namely less capacity intensive case and more capacity intensive case. Differently, from previous studies, we consider a scenario with a discounted selling price for reman products, shortage penalty costs, lost sales, disposal and uncertainty in demand, amount and yield of returns. Hence, to handle those uncertainties, a scenario-based stochastic programming model in a two-stage setting is presented. In the first stage, the raw material inventory and production capacity levels are planned and in the second stage, the production, inventory and disposal decisions are determined by balancing overage and underage costs. The results indicate that net values associated with new and reman products can be decisive in choosing eithermanufacturing or remanufacturing.

    • Author Affiliations

       

      K NAGESWARA REDDY1 AKHILESH KUMAR1 NAGENDRA R VELAGA2

      1. Department of Industrial and Systems Engineering, Indian Institute of Technology Kharagpur, Kharagpur, West Bengal 721302, India
      2. Civil Engineering Department, Indian Institute of Technology Bombay, Mumbai, India
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