Considering stochastic lead times in a manufacturing/remanufacturing system with deterministic demands and returns

In this paper we study a manufacturing/remanufacturing system with stochastic lead times and a constant demand. We base our approach on previous research in which we have developed models to describe an inventory system with stochastic lead times. In this paper, we first adopt this method to manufacturing/remanufacturing situations, where there are essentially two supply sources for replenishing serviceable inventory. We then provide a solution procedure when a cycle ordering policy is used. Secondly, we investigate the possibility to use a dual sourcing ordering policy in which each order is split between a manufacturing and a remanufacturing process. Finally, we compare the two ordering policies and illustrate how the lead-time patterns influence the economic consequences. (C) 2004 Elsevier B.V. All rights reserved.