In this study, we consider a segmented market for a product that can either be manufactured or remanufactured. It is assumed that the remanufactured products can be substituted by the new ones. A steady-state profit model is constructed under certain environmental assumptions on capacity requirements of operations, and revenue and cost schemes. Exact steady-state probabilities of the Markovian model constructed are solved via matrix geometric techniques. An extensive computational study is performed to investigate the conditions under which the utilization of remanufacturing option and the use of one-way substitution policy increase the average expected profit.

Inventory, One-way substitution, Remanufacturing
dx.doi.org/10.1057/palgrave.jors.2601799, hdl.handle.net/1765/61203
Operational Research Society. Journal
Erasmus School of Economics

Bayindir, Z.P, Erkip, N, & Güllü, R. (2005). Assessing the benefits of remanufacturing option under one-way substitution. Operational Research Society. Journal, 56(3), 286–296. doi:10.1057/palgrave.jors.2601799