Threshold-type admission policy for remanufacturing systems

This paper considers a reassemble-to-order system for modular products with admission control on product returns in a remanufacturing environment. Customer warranty claims trigger orders for product replacement by new or remanufactured products. At the same time, the warranty claims also generate returns of used products. The return process of used products is a stochastic process with uncertainties in arriving time, quality and quantity. We then develop a quasi-birth-and-death (QBD) model to obtain the key performance measures of the system. We start with a single quality grade problem and conduct exact analysis of the performance as a function of the admission control variables. Through extensive numerical experiments, we provide managerial insights into decision-making for the assemble-to-order remanufacturing systems with stochastic warranty returns.