A Stochastic Inventory Control Model Based on Returned Products Permitted

With the growth of environment concerns, the reuse of used products has received increasing attention so that a new field--"Reverse Logistics" emerged. Inventory management is one of its important areas. Assuming independent Poisson demand and returns process, an inventory control model based on returned products permitted is presented. An optimal control policy is derived. Results indicate that the rates of returned products have distinct influence on order quantities and profits of seller. The results suggest that seller should adopt efficiency measures to decrease the rates of returned products.