Performance analysis of a hybrid system under quality impact of returns

Abstract

Remanufacturing is the process which transforms used products, consisting of components and parts, into products that satisfy the same quality and other standards as new ones. Systems that remanufacture used products face several complicating factors that limit the effectiveness of traditional methods for manufacturing planning and control. Original equipment manufacturers that choose to remanufacture their own products can either meet the demand with remanufactured products, or new products, or a combination of both when they are perfect substitutes. Such systems are referred to as hybrid production systems. In this study we analyze a hybrid system which meet the demand with remanufactured products, or new products, or a combination of both. In the remanufacturing stage there are uncertainties in the quality of remanufactured products, return rates and return times of these returned products. These uncertainties affect the raw material order quantities, processing times and material recovery rates. In the study returned products are classified by considering quality uncertainties and remanufacturing processing times, material recovery rates, remanufacturing costs and disposal costs are determined according to this classification. The objective of the study is to examine the inventory control model that balances the system throughput with the order arrivals and minimizes the total cost per unit. In order to compare several inventory control strategies simulation models are constructed by using the ARENA simulation program. In the conclusion of the study it is denoted that classifying returned prod- ucts according to quality uncertainties decreases the total cost per unit and the best inventory control model for the analyzed hybrid system is proposed.