An EOQ Model for Reuse and Recycling Considering the Balance of Supply and Demand
Tomomi Nonaka* and Nobutada Fujii**
*Department of Industrial and Systems Engineering, Aoyama Gakuin University
5-10-1 Fuchinobe, Chuo-ku Sagamihara-shi, Kanagawa 252-5258, Japan
**Graduate School of System Informatics, Kobe University
1-1 Rokkodai, Nada, Kobe, Hyogo 657-8501, Japan
Inventory management in reverse logistics is more complex than that in conventional logistics because of uncontrollable factors such as inventory levels increasing from reverse logistics, greater-than-expected disposal, and balance of supply and demand with changing market trends. This paper proposes a new economic order quantity (EOQ) model for reuse and recycling by expanding the EOQ model proposed by Dobos and Richter, 2004. The proposed model introduces a sequentially accumulated marginal reuse rate as a parameter in considering the balance of product demand and supply. The marginal reuse rate is calculated by using data on production distribution and disposal distribution of products for every discretized period. This model considers the sequence among recovery options: reuse, recycle and disposal. Parts are reused after having been inspected to determine whether they are reusable or not. Remaining nonreusable parts are recycled and any remaining nonrecycled parts disposed of. The extended EOQ model is applied to a case study using different scenarios for length of use and multiple generations of products. Results of computer experiments confirmed the effectiveness of the proposed method.
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