Track: Supply Chain Management

Abstract

This paper addresses an integrated new problem of production-inventory planning and supplier selection based on quantity discounts in a Closed Loop Supply Chain (CLSC) environment where backorders are allowed. The process of remanufacturing, specifically the problem of recovery of components from the acquired used products and remanufacturing of the components as-good-as new is considered. An existing mathematical model has been considered and modified in line with the current problem. Since the proposed mathematical model is computationally intractable for solving large scale real-life sized problem, a sequential heuristic method is proposed and the same is seen to provide near optimal solution for small scale problem instances. Furthermore, though the prime objective of the study is maximizing profit, the heuristic is designed in a way that encourages deriving maximum benefit from acquired used products even though it might result in compromising on total profit. This is in line with the motto of CLSC to reduce dependency and use of virgin raw materials and also reduce disposal in landfills.