The economic lot-sizing problem with remanufacturing and inspection for grading heterogeneous returns

Abstract

We address an extension of the economic lot-sizing problem with remanufacturing in which returns are assumed dissimilar and an inspection activity is required in order to grade them into a finite number of pre-established nominal qualities of either remanufacturable or non-remanufacturable returns. There are set-up costs related to the production activities, including inspection. Separate inventories are assumed for incoming returns, inspected-and-graded returns and serviceable (new or remanufactured) products. Remanufacturing, discarding and inventory holding costs depend on the quality of the returns. The objective is to determine when and how much to inspect, remanufacture, discard and produce in order to meet the demand requirements on time, minimizing the sum of all the involved costs. For this problem we provide a mathematical programming formulation and suggest several lot-sizing rules based on different inspection and remanufacturing decisions. We also show the problem is NP-hard and provide a property about the form of its optimal solutions. An extensive numerical experimentation is conducted in order to analyse the behaviour of the lot-sizing rules suggested, considering different values for the problem parameters. The results obtained show that remanufacturing can offer economic benefits even in the case of an independent and relatively expensive inspection. In addition, we can conclude that the inspection of all incoming returns is in general the most cost-effective decision, even if not all of them are remanufactured.

This is a preview of subscription content, log in to check access.

Fig. 1

References

  1. 1.

    Alamerew YA, Brissaud D (2018) Circular economy assessment tool for end of life product recovery strategies. J Remanuf. https://doi.org/10.1007/s13243-018-0064-8

    Article  Google Scholar 

  2. 2.

    Aras N, Boyaci T, Vergter V (2004) The effect of categorizing returned products in remanufacturing. IIE Trans 36:319–331

    Article  Google Scholar 

  3. 3.

    Barquet AP, Rozenfeld H, Forcellini FA (2013) An integrated approach to remanufacturing: model of a remanufacturing system. J Remanuf 3(1):1–11

    Article  Google Scholar 

  4. 4.

    Denizel M, Ferguson M, Souza GC (2010) Multiperiod remanufacturing planning with uncertain quality of inputs. IEEE Trans Eng Manag 57(3):394–404

    Article  Google Scholar 

  5. 5.

    Dong M, Lu S, Han S (2011) Production planning for hybrid remanufacturing and manufacturing system with component recovery. In Advances in Electrical Engineering & Electrical Machines, D. Zeng (Ed.), LNEE 134, pp. 511–518

  6. 6.

    Esenduran G, Kemahlıoglu-Ziya E, Swaminathan JM (2016) Take-back legislation: consequences for remanufacturing and environment. Decis Sci 47(2):219–256

    Article  Google Scholar 

  7. 7.

    Esenduran G, Kemahlıoglu-Ziya E, Swaminathan JM (2017) Impact of take-back regulation on the remanufacturing industry. Prod Oper Manag 26(5):924–944

    Article  Google Scholar 

  8. 8.

    Ferguson M, Guide VD Jr, Koca E, Souza GC (2009) The value of quality grading in remanufacturing. Prod Oper Manag 18(3):300–314

    Article  Google Scholar 

  9. 9.

    Fernández E, Devoto C, Piñeyro P (2019) Recovery analysis of domestic electric storage water heaters. In Proceedings of EcoDesign 2019 International Symposium, pp. 976–983

  10. 10.

    Goltsos TE, Ponte B, Wang S, Liu Y, Naim MM, Syntetos AA (2018) The boomerang returns? Accounting for the impact of uncertainties on the dynamics of remanufacturing systems. Int J Prod Res 57(23):7361–7394

    Article  Google Scholar 

  11. 11.

    Gungor A, Gupta SM (1999) Issues in environmentally conscious manufacturing and product recovery: a survey. Comput Ind Eng 36(1):811–853

    Article  Google Scholar 

  12. 12.

    Karvonen I, Jansson K, Uoti M (2013) Promoting remanufacturing through collaboration. IFIP - International Federation for Information Processing 408:599–608

  13. 13.

    Konstantaras I, Skouri K, Jaber MY (2010) Lot sizing for a recoverable product with inspection and sorting. Comput Ind Eng 58:452–462

    Article  Google Scholar 

  14. 14.

    Kurilova-Palisaitiene J, Sundin E, Poksinska B (2018) Remanufacturing challenges and possible lean improvements. J Clean Prod 172:3225–3236

    Article  Google Scholar 

  15. 15.

    Kwak M (2015) Planning demand- and legislation-driven remanufacturing for a product family: a model for maximizing economic and environmental potential. Ind Eng Manag Syst 14(2):159–174

    Google Scholar 

  16. 16.

    Liao H, Deng Q, Wang Y, Guo S, Ren Q (2018) An environmental benefits and costs assessment model for remanufacturing process under quality uncertainty. J Clean Prod 178:45–58

    Article  Google Scholar 

  17. 17.

    Liao H, Deng Q, Shen N (2019) Optimal remanufacture-up-to strategy with uncertainties in acquisition quality, quantity, and market demand. J Clean Prod 206:987–1003

    Article  Google Scholar 

  18. 18.

    Liu Z, Chen J, Diallo C (2018) Optimal production and pricing strategies for a remanufacturing firm. Int J Prod Econ 204:290–315

    Article  Google Scholar 

  19. 19.

    Lundmark P, Sundin E, Björkman M (2009) Industrial challenges with the remanufacturing system. In: Proceedings of Swedish Production Symposium. Stockholm 2009, pp. 132–139

  20. 20.

    Mahapatra S, Pal R, Narasimhan R (2012) Hybrid (re)manufacturing: manufacturing and operational implications. Int J Prod Res 50(14):3786–3808

    Article  Google Scholar 

  21. 21.

    Matsumoto M, Umeda Y (2011) An analysis of remanufacturing practices in Japan. J Remanuf 1(2):1–11

    Google Scholar 

  22. 22.

    Mezghani M, Loukil T (2011) Remanufacturing planning with imprecise quality inputs through the Goal Programming and the satisfaction functions. In Proceedings of 4th International Conference on Logistics, pp. 122–125

  23. 23.

    Murray A, Skene K, Haynes K (2017) The circular economy: an interdisciplinary exploration of the concept and application in a global context. J Bus Ethics 140(3):369–380

    Article  Google Scholar 

  24. 24.

    Nenes G, Panagiotidou S, Dekker R (2010) Inventory control policies for inspection and remanufacturing of returns: a case study. Int J Prod Econ 125(2):300–312

    Article  Google Scholar 

  25. 25.

    Nenes G, Nikolaidis Y (2012) A multi-period model for managing used product returns. Int J Prod Res 50(5):1360–1376

    Article  Google Scholar 

  26. 26.

    Niknejad A, Petrovic D (2014) Optimisation of integrated reverse logistics networks with different product recovery routes. Eur J Oper Res 238(1):143–154

    MathSciNet  MATH  Article  Google Scholar 

  27. 27.

    Panagiotidou S, Nenes G, Zikopoulos C, Tagaras G (2017) Joint optimization of manufacturing/remanufacturing lot sizes under imperfect information on returns quality. Eur J Oper Res 258(2):537–551

    MathSciNet  MATH  Article  Google Scholar 

  28. 28.

    Paterson DAP, Ijomah WL, Windmill JFC (2017) End-of-life decision tool with emphasis on remanufacturing. J Clean Prod 148:653–664

    Article  Google Scholar 

  29. 29.

    Piñeyro P, Viera O (2009) Inventory policies for the economic lot-sizing problem with remanufacturing and final disposal options. J Ind Manag Opt 5(2):217–238

    MathSciNet  MATH  Google Scholar 

  30. 30.

    Piñeyro P, Viera O (2010) The economic lot-sizing problem with remanufacturing and one-way substitution. Int J Prod Econ 124:482–488

    Article  Google Scholar 

  31. 31.

    Piñeyro P, Viera O (2015) The economic lot-sizing problem with remanufacturing: analysis and an improved algorithm. J Remanuf 5(12):1–13

    Google Scholar 

  32. 32.

    Piñeyro P (2016) Inventory policies for the economic lot-sizing problem with remanufacturing and heterogeneous returns. In: Proceedings of the XVIII Latin-Iberoamerican Conference on Operations Research, pp. 687–694

  33. 33.

    Piñeyro P, Viera O (2018) Heuristic procedure for the economic lot-sizing problem with remanufacturing and recovery targets. J Remanuf 8:39–50

    Article  Google Scholar 

  34. 34.

    Retel-Helmrich MJ, Jans R, van den Heuvel W, Wagelmans APM (2014) Economic lot-sizing with remanufacturing: complexity and efficient formulations. IIE Trans 46(1):67–86

    Article  Google Scholar 

  35. 35.

    Richter K, Sombrutzki M (2000) Remanufacturing planning for the reverse Wagner/Whitin models. Eur J Oper Res 121(2):304–315

    MATH  Article  Google Scholar 

  36. 36.

    Ridley SJ, Ijomah WL (2015) A novel pre-processing inspection methodology to enhance productivity in automotive product remanufacture: an industry-based research of 2196 engines. J Remanuf 5:1–12

    Article  Google Scholar 

  37. 37.

    Ridley SJ, Ijomah WL, Corney JR (2019) Improving the efficiency of remanufacture through enhanced pre-processing inspection – a comprehensive study of over 2000 engines at Caterpillar remanufacturing, UK. Production Planning Control 30(4):259–270

    Article  Google Scholar 

  38. 38.

    Robotis A, Boyaci T, Verter V (2012) Investing in reusability of products of uncertain remanufacturing cost: the role of inspection capabilities. Int J Prod Econ 140:385–395

    Article  Google Scholar 

  39. 39.

    Schulz T (2011) A new Silver–Meal based heuristic for the single-item dynamic lot sizing problem with returns and remanufacturing. Int J Prod Res 49(9):2519–2533

    Article  Google Scholar 

  40. 40.

    Sifaleras A, Konstantaras I, Mladenović N (2015) Variable neighborhood search for the economic lot sizing problem with product returns and recovery. Int J Prod Econ 160(1):133–143

    Article  Google Scholar 

  41. 41.

    Sun H, Chen W, Liu B, Chen X (2018) Economic lot scheduling problem in a remanufacturing system with returns at different quality grades. J Clean Prod 170(1):559–569

    Article  Google Scholar 

  42. 42.

    Sundin E (2004) Product and process design for successful remanufacturing. PhD thesis, Linköping University, Sweden 2004

  43. 43.

    Tagaras G, Zikopoulos C (2008) Optimal location and value of timely sorting of used items in a remanufacturing supply chain with multiple collection sites. Int J Prod Econ 115:424–432

    Article  Google Scholar 

  44. 44.

    Tao F, Fan T, Jia X, Lai KK (2019) Optimal production strategy for a manufacturing and remanufacturing system with return policy. Oper Res Int J. https://doi.org/10.1007/s12351-019-00450-y

    Article  Google Scholar 

  45. 45.

    Teunter R, Bayındır Z, van den Heuvel W (2006) Dynamic lot sizing with product returns and remanufacturing. Int J Prod Res 44(20):4377–4400

    MATH  Article  Google Scholar 

  46. 46.

    Wei S, Tang O, Sundin E (2015) Core (product) acquisition management for remanufacturing: a review. J Remanuf 5(4):1–27

    Google Scholar 

  47. 47.

    Zikopoulos C (2012) Remanufacturing lot-sizing under alternative perceptions of returned units’ quality. Int J Business Sci Applied Manag 7(3):12–22

    Google Scholar 

  48. 48.

    Zikopoulos C (2017) Remanufacturing lotsizing with stochastic leadtime resulting from stochastic quality of returns. Int J Prod Res 55(6):1565–1587

    Article  Google Scholar 

Download references

Acknowledgements

We want to thank the staff of Rivomark for their valuable support, and in particular to their owners Fabián Vidoni and Enzo Vidoni. We also want to thank the anonymous referees for their helpful comments on the previous versions of this manuscript.

Author information

Affiliations

Authors

Contributions

The three authors contributed equally to this paper.

Corresponding author

Correspondence to Pedro Piñeyro.

Additional information

Publisher's Note

Springer Nature remains neutral with regard to jurisdictional claims in published maps and institutional affiliations.

Rights and permissions

Reprints and Permissions

About this article

Verify currency and authenticity via CrossMark

Cite this article

Devoto, C., Fernández, E. & Piñeyro, P. The economic lot-sizing problem with remanufacturing and inspection for grading heterogeneous returns. Jnl Remanufactur (2020). https://doi.org/10.1007/s13243-020-00089-5

Download citation

Keywords

  • Lot-Sizing Problem
  • Remanufacturing
  • Inspection
  • Heterogeneous returns
  • Mathematical Programming
  • Lot-sizing rules