Optimal production policy for a remanufacturing system with virtual inventory cost

Kenichi Nakashima*

*Corresponding author for this work

Research output: Contribution to journalConference articlepeer-review


This paper deals with a cost management problem of a remanufacturing system with stochastic demand. We model the system with consideration for two types of inventories. One is the actual product inventory in the factory. The other is the virtual inventory that is being used by the customer. For this virtual inventory, it should be required to consider an operational cost that we need in order to observe and check the quantity of the inventory. We call this the virtual inventory cost and model the system by including it. We define the state of the remanufacturing system by the two inventory levels. It is assumed that the cost function is composed of various cost factors such as holding, backlog and manufacturing costs. We obtain the optimal policy that minimizes the expected average cost per period. Numerical results reveal the effects of the factors on the optimal policy.

Original languageEnglish
Article number59970H
JournalProceedings of SPIE - The International Society for Optical Engineering
Publication statusPublished - 2005 Dec 1
Externally publishedYes
EventEnvironmentally Conscious Manufacturing V - Boston, MA, United States
Duration: 2005 Oct 232005 Oct 24


  • Optimal control
  • Product life cycle
  • Remanufacturing system

ASJC Scopus subject areas

  • Electronic, Optical and Magnetic Materials
  • Condensed Matter Physics
  • Computer Science Applications
  • Applied Mathematics
  • Electrical and Electronic Engineering


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