• Journal of the Korean Operations Research and Management Science Society
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• v.38 no.2
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• pp.43-63
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• 2013

Remanufacturing is a process of recovering end-of-life products into serviceable parts for producing new products. Due to the limited supply of recovery cores to remanufacture, a remanufacturing firm also needs to produce or procure new parts for fulfilling the demand. This paper is targeted for solving the problem of determining the optimal amount of newly produced and remanufacturing parts, which is called production and remanufacturing planning (PRP) problem, under uncertain supply of recovery cores. The new production mitigates the risk of insufficient core supply while it takes more costs than the remanufacturing. The PRP model in this paper also considers disassemble-to-order (DTO) environment, in which multiple kinds of parts are remanufactured from multiple products on order of the parts. Whereas existing studies presents only heuristic solutions for DTO remanufacturing, this paper provides an exact solution for this problem and analytical sensitivity of the involved cost parameters, adopting multi-dimensional newsvendor modeling and stochastic linear programming techniques. The result shows that production and remanufacturing plans for multiple products are mutually dependent, and a change of cost parameters involved in only one part is propagated to all other parts.