Optimization for a three-stage production system in the Internet of Things: procurement, production and product recovery, and acquisition

  • Chang FangEmail author
  • Xinbao Liu
  • Panos M. Pardalos
  • Jun Pei


Recovery of the end-of-use products has become a topic of considerable interest in the advanced manufacturing industry due in part to uncertainties in the quality and volume of product returns. The Internet of Things (IoT) that enables the tracing, detecting, storing, and analyzing the product life cycle data for each individual item can mitigate or eliminate these uncertainties. In this paper, an integrated three-stage model is presented based on IoT technology for the optimization of procurement, production and product recovery, pricing and strategy of return acquisition. The remaining value is used to measure the return condition. The model considers three recovery options related to refurbishing, component reuse and disposal, and the value deterioration for satisfying the product demand in each stage of product life cycle (PLC). A novel particle swarm optimization (PSO) algorithm based on two heuristic methods is proposed to solve the problem. A numerical example and sensitivity analysis are used to illustrate the performance of both algorithm and applicability of the model.


Internet of Things Procurement Product recovery Return acquisition Value deterioration 


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Copyright information

© Springer-Verlag London 2015

Authors and Affiliations

  • Chang Fang
    • 1
    • 2
    • 3
    Email author
  • Xinbao Liu
    • 1
    • 3
  • Panos M. Pardalos
    • 2
  • Jun Pei
    • 1
    • 2
    • 3
  1. 1.School of Management, Department of Information Management and Information SystemsHefei University of TechnologyHefeiChina
  2. 2.Center for Applied Optimization, Department of Industrial and Systems EngineeringUniversity of FloridaGainesvilleUSA
  3. 3.Key Laboratory of Process Optimization and Intelligent Decision-Making of Ministry of EducationHefeiChina

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