An economic production quantity model with refurbishment policy in dual-channel logistics

Article Type

Research Article

Publication Title

Journal of Cleaner Production


This work considers a dual logistics model with production and refurbishment simultaneously where the manufacturer accumulates all the return items in return inventory and sends it for refurbishment. The novelty of this work is in utilizing the strategy “buying green” and defining the demand function as dependent on selling price and environmental parameters. This study also examines whether the manufacturer works better as an original equipment manufacturer (forward logistics), as a manufacturer–refurbisher or as an independent refurbisher (reverse logistics) and analyses their effect on environment through carbon emission. Most of the reverse logistics model considers production inventory and refurbished/remanufactured inventory consecutively which is not realistic at all. The new item inventory is much more higher than the refurbished inventory because of the low acceptance rate of refurbished product. So, in this model, the return time of product is random. The aim of this work is to optimize the return time and how much return quantity can be accepted for a single time planning horizon. The findings of this work reveal that the total average cost is minimized with reverse logistics, and from the environmental perspective also, the models with reverse logistics are better than the forward logistics path only. Further, we have investigated the sensitivity analysis and shows that with high quality of production process, we can minimize the carbon emission up to a certain level and refurbishment is good only when refurbishment cost is smaller than the production cost. Finally, we carry out the graphical illustrations to justify our models.



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