Control of a production-inventory system with returns under imperfect advance return information

S.D.P. Flapper, J.-Ph. Gayon, S. Vercraene

Research output: Contribution to journalArticleAcademicpeer-review

34 Citations (Scopus)
4 Downloads (Pure)

Abstract

We consider a production–inventory system with product returns that are announced in advance by the customers. Demands and announcements of returns occur according to independent Poisson processes. An announced return is either actually returned or cancelled after a random return lead time. We consider both lost sale and backorder situations. Using a Markov decision formulation, the optimal production policy, with respect to the discounted cost over an infinite horizon, is characterized for situations with and without advance return information. We give insights in the potential value of this information. Also some attention is paid to combining advance return and advance demand information. Further applications of the model as well as topics for further research are indicated.
Original languageEnglish
Pages (from-to)392-400
Number of pages9
JournalEuropean Journal of Operational Research
Volume218
Issue number2
DOIs
Publication statusPublished - 2012

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