ABSTRACT
Nowadays, buy-back scheme has been used to control thereturn flow for remanufacturing. However, effect of return policy of usedproducts is not widely studied, especially for remanufacturing operation. Inthis paper, we propose a mathematical model for the return policy problem inthe remanufacturing system by incorporating yield rate and cost saving ofremanufacturing operations. It develops a profit-maximization model for optimalpolicies in terms of some market reaction and production technologicalparameters. It also provides extensive numerical experiments to illustrate theeffect of changes in these parameters on the decision variables.

Keywords

Remanufacture, Return Policy, ReverseLogistics, Buy-back Price, Used products

1.Introduction

Environment and energy issues arerapidly emerging as the most important topics for every country. Everyday,there are lots of wastes generated from consumption activities and only littleof them would be recovered, the remainder goes to landfills or other disposalfacilities. Since the capacity of landfill is limited, and landfill activitieswill waste lots of energy, dumping the product at the end of its life is not along term solution for used products. Reverse logistics is viewed as the bestway to dispose the used products.