Inventory Model Of Reverse Logistics

Abstract. Reverse logistics systems have become increasingly popular over the last decade in the business and academic community. Firms incorporate reverse flow to their systems for such reasons as ecological and economic factors, government regulations and social responsibilities. Reverse logistics manage the flow of returned used products for remanufacturing or repairing or other purposes. We developed a centralized open loop supply chain inventory model with the joint determination of reproduction and procurement through the time dependent rates under the situation in which the supplier provides the purchaser with a permissible delay of payments. As a result, in this article, we establish a mathematical model to determine the optimal payment

The first reported work is that of Schrady [15] who developed an EOQ model for repaired items where production and repair rates are instantaneous with no disposal cost. Nahmias and Rivera [13] considered the model of Schrady [15] for the case of finite repair rate and limited storage in the repair and production shops. Koh et al. [10] generalized the model of Nahmias and Rivera [13] by assuming a limited repair capacity. Dobos and Richter [5] explore a reverse logistics inventory system with non instantaneous production and remanufacturing rate. Dobos and Richter [6] generalized their earlier work [5] to the case of multiple remanufacturing and production cycle. Dobos and Richter [7] explored their previous model by assuming that the quality of collected used items is not always suitable for further recycling. Dekker et al. [4] proposed a quantitative model for closed loop supply chain. He investigated that the amount of returns is highly uncertain and this uncertainty greatly affect the collection and inventory decisions. Savaskan et al. [14] developed a reverse logistic inventory model considering the return rate is affected by the collection investment. They analyzed a decentralized supply chain, in which all participants pursue their own profit. The collection investment represents the economic amount of effort (e.g., promotion, marketing) that the recycled-material supplier applies to the end-user market to create the necessary incentive to receive targeted returns. King et al. [13] defined the term repair as the correction of specified faults in a product, where the quality of repaired products is inferior to those of remanufactured. Srivastav [20] generalized an overview in green supply chain. He showed that reverse logistics is a complex process to achieve greater economic benefits.