Infinitesimal perturbation analysis based optimization for a manufacturing-remanufacturing system

In this paper, a manufacturing/ remanufacturing system composed by two parallel machines, a manufacturing buffer, a recovery buffer and a customer who demands a constant quantity of product. To describe the system, a stochastic fluid model is adopted and which take into account returned products and remanufacturing products. The objective of this paper is to evaluate the optimal manufacturing buffer. This optimal level allows minimizing the total cost which is the sum of inventory and lost sales costs. Infinitesimal perturbation analysis is used for optimization of the manufacturing/ remanufacturing system. The trajectories of the buffer level are studied and the infinitesimal perturbation analysis estimates are evaluated. These estimates are shown to be unbiased and then they are implemented in an optimization algorithm which determines the optimal buffers levels in the presence of returned products and remanufacturing products.