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An optimal control problem for collecting used products was considered in a reverse logistics system when a remanufacturing firm faces random arrivals and deterministic demands for used products. Traditionally, the return process of used products is considered as exogenous, which is out of control of the firm, and makes a huge burden for the firm. However, if the firm takes buy-back policy for used products, it will change the firm’s passive position. Firstly, a Markov Decision Process model with random input which is controlled by the price was proposed. Secondly, an optimal state-dependent solution with two critical states was given. Finally, a dynamic programming algorithm for solving the optimal state-dependent policy was developed. |
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Keywords:Remanufacturing, Reverse logistics, Stochastic inventory,Markov decision process (MDP) |
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