Economic ordering quantities for manufacturing/recovery inventory system with outsourcing

In this paper, a mathematical model is developed to analyze the deterministic economic ordering quantities (EOQ) for inventory system of remanufactured items with outsourcing. In the remanufacturing system, the manufacturer will outsource partial remanufacturing with its insufficient capacity. With consideration of different holding cost rates for serviceable items and non-serviceable items, we derive EOQ formulas for both the manufacturing batch quantity and the recovery batch quantity. Numerical examples are illustrated the efficacy of the developed model and the procedure developed for solving the problem.