The production, remanufacture and waste disposal model with lost sales

Inventory management in reverse logistics has been receiving increasing attention in recent years. One of the inventory problems that has been of interest to researchers is the production, remanufacture (repair) and waste disposal model, where used items are collected and remanufactured to “as-good-as new” state. The available models in the literature assume that customers' demand is satisfied from newly manufactured (produced) items and from remanufactured (repaired) items. This may be true in few industries, but not in other industries where customers do not consider “new” (“manufactured”) and “remanufactured” (“repaired”) items as being interchangeable. This paper extends along this line of research and assumes that demand for manufactured items is different from that for remanufactured (repaired) ones. This assumption results in lost sales situations where there are stock-out periods for manufactured and remanufactured items. Mathematical models are developed and numerical examples provided with results discussed.