Production planning optimization for manufacturing and remanufacturing system in stochastic environment

Abstract

This article studies a single item dynamic lot sizing problem with manufacturing and remanufacturing provisions. The demands and returns are considered as both stochastic and deterministic. There are two inventories recoverable and serviceable inventory. We developed a dynamic programming based model with objective to determine the quantities that have to be manufactured or re-manufactured at each period in order to minimize the total cost, including production cost, holding cost for returns and finished goods, and backlog cost. Also, unit production cost is also taken as variable in case of deterministic case. Finally, a numerical example for each of deterministic and stochastic model is worked out to illustrate how the model is applied and to prove its feasibility.