Optimal Control of a One Product Recovery System with Backlogging

Abstract

In this paper a product recovery system for one product is investigated. The system contains one inventory for returned and recoverable items and one for serviceable items. Demands are satisfied from serviceable inventory where backlogging of demands is allowed. In addition, there is the possibility of disposal for the returned products. We assume deterministic but dynamic return and demand rates and a linear cost structure. Pontryagin's Maximum Principle is used to determine the optimal production, remanufacturing and disposal policy.