Stochastic Inventory Control for Product Recovery Management

Abstract

Essentially, inventory management concerns the process of deciding on 1) how often to review stocks, 2) when to replenish stocks, and 3) how much to replenish. This basic focus of inventory management persists in the presence of item returns that can be recovered and then used for servicing demand. However, the details and complexities with which the three basic decisions manifest themselves can, and usually do, differ greatly due to the presence of recoverable-item flows. This, and the practical relevance of inventory management with recoverables, warrants the development of inventory theory that explicitly includes flows of recoverable items.