User phase information based inventory policy for supply chain systems with remanufacturing

Most of the literatures for inventory management policies of supply chain systems with remanufacturing had focused solely on warehouse operation. The existence of its optimal policy has yet been confirmed. In addition, the IT platform nowadays has been well developed so that user phase alignment could be executed at relatively low cost and it is a global phenomenon for companies to pursue cross-tier stretch along its value chain. In this study, a supply chain model comprised of three major biz entities (warehouse, remanufacturing facility and user phase) is presented. An optimal (s,S) type policy for this model is first introduced under the non-leadtime assumption and then extended to the leadtime scenario. The theoretically optimal policy is not applicable as a consequence of lacking information with regard to the failure product's return flow. In order to solve this issue, data mining within the user phase is executed and the specification of user phase information that serves to implementing the optimal policy is articulated. Additionally, numerical experiments are presented to verify the optimality of the (s,S) type policy and the contribution of user phase information sharing to inventory cost reduction.