Product recovery policies in stochastic remanufacturing systems with multiple reuse options

In many product recovery situations returned products can be reused in multiple ways. Under these circumstances the problem arises in which quantities reusable items should be allocated to the different remanufacturtng options, especially in case of insufficient stock of returns. For this problem a pertodic review model Is formulated which also includes a disposal option and incorporates uncertainties in returns and demands for the different serviceable options. The structure of the optimal policy Is analyzed, and it Is shown that under specific allocation rules a near-optimal policy with a simple structure exists. An effiCient computational procedure for determination of the optimal policy parameters is presented. This procedure Is applied in a numertcal investigation that gives interesting managertal insights in important product recovery issues.