A study on remanufacturing of used products in a Vendor-Buyer supply chain

Protecting the environment has became a priority for most countries in recent years. Recycling material and remanufacturing used products are inevitable options to reduce waste generation and the exploitation of natural resources. Remanufacturing is often considered as a environmental preferable choice of end of life option in comparison to material recycling or manufacturing of new products. The forward supply chain essentially involves the movement of products from upstream suppliers to the downstream customers while the reverse supply chain involves the movement of used products from customers to upstream suppliers. This paper proposes the study of remanufacturing in the closed loop supply chain consisting of a vendor(manufacturer) and a buyer(retailer). The used products collected by the buyer from the customers are remanufactured by the vendor. The inventory holding cost of collected used products are involved in the model. The optimal lot size of remanufactured products and the collection rate of used products to be remanufactured are obtained which minimize the joint total cost of the supply chain. Finally a numerical example is provided for the described model.