Optimization model for remanufacturing in a real world sawmill

Sawmills are an important part of the forest supply chain, and as at any company, their production planning is highly complex. Planning in the remanufacturing area, in terms of its economic contribution to the sawmill and the supply chain, has not been studied in the scientific literature. The goal of this study was to develop and solve a mixed-integer linear programming model by employing an efficient allocation of cutting patterns on in-stock logs to maximize profits. To quantify the impact of an appropriate use of raw materials in the remanufacturing area in a sawmill, real and generated data were used. The model considers fixed and variable production costs, the availability of raw material, the capacity of the processes, the sale price of the products and the demand, for a process period of one month. The proposed compact mixed-integer linear programming model was solved using the commercial solver IBM ILGO CPLEX12.8. It was determined that the additional margin in USD earned in the remanufacturing area for the considered scenarios amounted to an average of 21.6%. The proposed method facilitates evaluating the economic contribution of remanufacturing while identifying bottlenecks and assessing proposed scenarios.