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.
-  L. D. DeSimone and F. Popoff, “Eco-efficiency,” The MIT Press, 1997.
-  H. Komoto, S. Kondoh, and K. Masui, “Simulating the Formulation of Urban Mines Considering the Rational Decisions of Distributed End-of-Life Stakeholders,” Int. J. of Automation Technology, Vol.8, No.5, pp. 653-663, 2014.
-  M. Fleischmann, J. M. Bloemhof-Ruwaard, R. Dekker, E. van der Laan, J. A. E. E. van Nuen, and L. N. van Wassenhove, “Quantitative models for reverse logistics: A review,” European J. of Operational Research, Vol.103, pp. 1-17, 1997.
-  I. Dobos and K. Richter, “An Extended Production/Recycling Model with Stationary Demand and Return Rates,” Int. J. of Production Economics, Vol.90, No.3, pp. 311-323, 2004.
-  D. A. Schrady, “A Deterministic Inventory Model for Reparable Items,” Naval Research Logistics Quarterly, Vol.14, No.3, pp. 391-398, 1967.
-  N. Nahmias and H. Rivera, “A Deterministic Model for Repairable Item Inventory System with a Finite Repair Rate,” Int. J. of Production Research, Vol.17, No.3, pp. 215-221, 1979.
-  R. Teunter, “Lot-sizing for Inventory Systems with Product Recovery,” Computers & Industrial Engineering, Vol.46, No.3, pp. 431-441, 2004.
-  K. Richter, “The EOQ Repair and Waste Disposal Model with Variable Setup Numbers,” European J. of Operations Research, Vol.95, No.2, pp. 313-324, 1996.
-  I. Dobos and K. Richter, “The integer EOQ repair and waste disposal model – further analysis,” Central European J. of Operations Research, Vol.8, No.2, pp. 173-194, 2000.
-  G. Nenes, S. Panagiotidou, and R. Dekker, “Inventory Control Policies for Inspection and Remanufacturing of Returns: A Case Study,” Int. J. of Production Economics, Vol.125, No.2, pp. 300-312, 2010.
-  M. Y. Jaber and A. M. A. El Saadany, “The Production, Remanufacture and Waste Disposal Model with Lost Sales,” Int. J. of Production Economics, Vol.120, No.1, pp. 115-124, 2009.
-  M. Y. Jaber, M. Bonney, and I. Moualek, “An Economic Order Quantity Model for an Imperfect Production Process with Entropy Cost,” Int. J. of Production Economics, Vol.118, No.1, pp. 26-33, 2009.
-  Y. Umeda, S. Kondoh, T. Sugino, and H. Yoshikawa, “Analysis of Reusability using Marginal Reuse Rate’,” CIRP Annals – Manufacturing Technology, Vol.55, No.1, pp. 41-44, 2006.
-  F. W. Harris, “What Quantity to Make at Once,” The Library of Factory Management, 5: Operation and Costs, A. Q. Shaw Company, pp. 47-52, 1915.
-  M. Omar and I. Yeo, “A Model for a Production–Repair System under a Time-varying Demand Process,” Int. J. of Production Economics, Vol.119, No.1, pp. 17-23, 2009.
-  R. Klever, S. Minner, and G. Kiesmuller, “A Continuous Time Inventory Model for a Product Recovery System with Multiple Options,” Int. J. of Production Economics, Vol.79, No.2, pp. 121-141, 2002.
-  S. Takata and T. Kimura, “Process Management in Closed-loop Manufacturing based on Life Cycle Simulation: Parts Ordering Policies in Consideration of Part Reuse,” Proc. Manufacturing Systems Division Conf., pp. 25-26, 2004 (in Japanese).
-  H. Hiraoka and A. Tanaka, “Simulator for Reuse of Mechanical Parts with Network Agents,” Int. J. of Automation Technology, Vol.3, No.1, pp. 77-83, 2009.
-  S. Kondoh, T. Tateno, and M. Matsumoto, “Multi-agent Simulation of Component Reuse Focusing on Variations in User Preference,” CIRP J. of Manufacturing Science and Technology, Vol.1, No.4, pp. 287-293, 2009.
-  T. Nonaka, T. Kaihara, N. Fujii, and J. Zhu, “Reuse and Recycle EOQ Model for Reverse Logistics with a Marginal Reuse Rate,” Proc. of the 15th Int. Conf. on Precision Engineering, pp. 460-465, 2014.