Lot-Size Model for a Recovery System with Backordering and Disposal

This paper addresses the production lot-size problem of a recovery system with backordering and disposal. For this recovery system, shortages are allowed and fully backordered, and only a portion of returned products are remanufactured and the rest are disposed off. The constant demand is satisfied by serviceable inventory which consists of manufactured items and remanufactured items. Two types of policy are analyzed, and an optimization algorithm for the optimal manufacturing and remanufacturing policies is proposed. The results are general as backordering and disposal in the recovery environment are investigated simultaneously.