A Production and Repair Model under a Time-Varying Demand Process

In this paper, we propose a model for a production system that satisfies a continuous time-varying demand for a finished product over a known and finite planning horizon by supplying both new and repaired items. New items are fabricated from a single type of raw material procured from external suppliers, while used items are collected from the customers and then repaired to an `as new condition before being sold again. For simplicity, we assume that there is no collection of used items during the repair uptime and downtime periods. The problem is to determine a joint policy for raw materials procure-ment, new items fabrication and used items repair such that the total relevant cost of the model is minimized. We propose a numerical solution procedure and we illustrate the model with some numerical examples and a simple sensitivity analysis.