Operation Model for a Class of Manufacturing/Remanufacturing System with Uncertain Demands

The operation process for a class of manufacturing/remanufacturing system is considered. In this system, demands of ultimate products are uncertain and can be described as a scenario set with certain probability. According to the uncertain demands, the manufacturer has two alternatives for manufacturing: either ordering the required parts to external suppliers or overhauling returned products and bringing them back to 'as new' conditions. By using the approach of robust optimization based on scenario analysis, an operation model is constructed to maximize the total profits by optimally deciding, the number of purchased parts from external suppliers, the quantity of parts to be processed at each remanufacturing facilities. The model is validated through a set of experimental data reflecting practical business situation and sensitivity analyses are conducted on various parameters to gain insight into the proposed model