Abstract:

The effects of the return payment on inventory management were studied for a joint manufacturing and remanufacturing system. An inventory system was proposed that has two replenishment channels including a forward channeland a remanufacturing channel. First, a singleproduct multiperiod stochastic inventory model was formulated under the assumption that the return payment policy influences the probability of the quantity of the product returns. Then the optimal inventory replenishment policy was derived to maximize the expectedprofit of the system. Finally, numerical examples were provided for parameter analysis.

Key words: remanufacturing; stochastic inventory; closedloop supply chain; return payment