Background analysis for the application of EOQ model in a three-stage steel roller production system with deterministic demands and returns

Facing increasing market competitions, more manufacturers opt to incorporate remanufacturing into their production system in order to alleviate pressures due to increasing raw material price. The management of inventories in the production system becomes more complex when manufacturing and remanufacturing take place simultaneously. It is essential to find a way to decide when remanufacturing should starts and stops at a lower cost. This paper introduces a manufacturing/remanufacturing system with multiple serviceable inventories and multiple recoverable inventories in a steel roller producing process. By considering manufacturing and remanufacturing in the different stages, three modes of production are identified. Then, the inventory profiles in the system are studied to make preparation for the application of EOQ model in the steel roller production process to decide the optimal order quantities and the optimal order time between various serviceable inventories with the view of minimizing the average cost.