Robust optimal inventory and acquisition effort decisions in a hybrid manufacturing/remanufacturing system

This paper considers a stochastic multi-period inventory and acquisition effort decisions problem in a hybrid manufacturing/remanufacturing system. Different from past papers, two factors are introduced into the dynamic decision problem. One is the dependency between sales and returns, the other is...

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Bibliographic Details
Published in:Journal of industrial and production engineering 2019-07, Vol.36 (5), p.335-350
Main Authors: Zhou, Yan-Cong, Sun, Xiao-Chen
Format: Article
Language:English
Subjects:
acquisition effort
Convexity
Decision analysis
Decision making
Dependence
Dynamic programming
Hybrid systems
Inventory
Inventory control
Manufacturing
manufacturing/remanufacturing system
Optimization
Remanufacturing
robust optimization
Robustness (mathematics)
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Summary:This paper considers a stochastic multi-period inventory and acquisition effort decisions problem in a hybrid manufacturing/remanufacturing system. Different from past papers, two factors are introduced into the dynamic decision problem. One is the dependency between sales and returns, the other is the dual impacts of acquisition effort on the return of used products and the demand. Few past papers consider them, but they are important and unavoidable for many practical cases. These factors make the problem a high-dimensional decision-making problem, which is difficult to analyze and solve the optimal policy by stochastic dynamic programming, so we employ the robust optimization method. Based on the duality theory, an equivalent robust optimization model is given, which is a convex programming problem. By numerical analyses, we analyze the effects of system parameters on the related decisions and profits, which can provide insights for producers to manage their hybrid manufacturing/remanufacturing systems.
ISSN:2168-1015
2168-1023
DOI:10.1080/21681015.2019.1650836