A Single-Item Uncapacitated Lot-Sizing Problem with Remanufacturing and Outsourcing

AbstractThis paper addresses the single-item, dynamic lot-sizing problem for systems with remanufacturing and outsourcing. Therein, demand and return amounts are deterministic over a finite planning horizon. Demand may be satisfied by the manufacturing of new items, remanufactured items, or outsourcing, but it cannot be backlogged. The objective of this study is to determine the lot sizes for manufacturing, remanufacturing, and outsourcing that minimise the total cost, which consists of the holding costs for returns and manufactured/remanufactured products, setup costs, and outsourcing costs. The problems addressed in this paper are an extension of those addressed by Richter et al. (2000,and 2001), Teunter et al. (2006), and Aksen et al. (2003). In this paper, the separate setup costs scheme is considered, we propose a dynamic programming approach to derive the optimal solution in the case of large quantities of returned product. The complexity of this dynamic programming approach is O(T2), wherein T is the number of periods in the planning horizon