Inventory decision-making models for a closed-loop supply chain system

Abstract

A closed-loop supply chain system is investigated. This system consists of a retailer, a manufacturer, a supplier, and a collector. The demand of the retailer is satisfied either by newly manufactured products or by remanufactured products which are comparable to the new ones in function and quality. We apply one manufacturing cycle and at least one remanufacturing cycle policy and at least one manufacturing cycle and one remanufacturing cycle policy to the manufacturer's manufacturing and remanufacturing operations, and give the corresponding procedures to determine the optimal system policy in the completely decentralised decision-making case and the completely centralised decision-making case by elimination theory and the difference function. A numerical comparison of our results with those of Chung et al. (2008 Chung, SL and Wee, HM. 2008. Green-component life-cycle value on design and reverse manufacturing in semi-closed supply chain. International Journal of Production Economics, 113(2): 528–545. [Crossref], [Web of Science ®] , [Google Scholar]. Optimal policy for a closed-loop supply chain inventory system with remanufacturing. Mathematical and Computer Modelling, 48 (5–6), 867–881) is also performed. The results are general since the manufacturer tends to adopt one manufacturing cycle and at least one remanufacturing cycle policy when the return rate is higher; otherwise, the manufacturer tends to adopt at least one manufacturing cycle and one remanufacturing cycle policy.