Author:

Keywords:

Network design, Queueing networks, Remanufacturing, Contracting

Abstract:

Remanufacturing activities are gaining momentum in the manufacturing industry. Therefore, the need for optimized networks becomes more pressing. In this paper we take a profit maximization approach to simultaneously determine the optimal network and the delivery strategy to support remanufacturing services offered to customers. In order to set up a network, investment decisions have to be made concerning the number, locations and types of remanufacturing facilities. Additionally, appropriate capacity and inventory levels have to be set in order to guarantee a given service level. These network decisions are influenced by the way the remanufacturing services are offered by the manufacturing firm. We consider two possible service delivery strategies: the service provider can either make a quick exchange of the used part by a refurbished one or re-install the original part after remanufacturing it. The model described in this paper is applied to optimize the network and service delivery strategy at a worldwide manufacturer of construction, mining and industrial equipment.