Production Policy Optimization in Flexible Manufacturing-Remanufacturing Systems

Hybrid systems that use in their production process both raw materials (manufacturing mode), and returned products (remanufacturing mode) are considered. The system is supposed to be fully flexible and able to share its production time between manufacturing and remanufacturing. The system performance is evaluated using a piecewise linear function of serviceable and return inventories. Limited flow rate of returned products results in the state constraint on the return inventory and imposes additional limitations on the system feasibility. Such systems, to the best of the authors knowledge, were not previously considered in the literature. After characterizing manufacturing-remanufacturing strategies analytically, we propose some heuristics that approximate optimal policies in case of systems without failures, and then extend them to the case of failure-prone systems. We present the numerical study based on the solution of Hamilton-Jacobi-Bellman equations, that complements analytical results and allows to validate the proposed sub-optimal policies.