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Simulation of a stochastic inventory model for a hybrid manufacturing-remanufacturing system

The supply chain is a system where activities are linked together. The organization and the management of these activities are primordial for the proper functioning of the chain. In fact, the supply chain management consists of restructuring the flows while optimizing the costs as much as possible. Nowadays, the world is interested in the reverse supply chain which includes the product returns and their disposition. But the integration of the reverse flow in the supply chain complicates more the functioning of the system. In this paper, we focus on studying the inventory control for a system which includes remanufacturing in a production system. We consider a hybrid manufacturing-remanufacturing system performed by a single machine for two types of demands. The demands of remanufactured and new products are fulfilled from separated stocks. Three types of stocks for returned, remanufactured, and new products exist independently. Both, manufacturing and remanufacturing are executed by a single machine that is subject to random failures and repairs. All returned products are accepted and supplied by a collection center and no disposal option is allowed. The performance of the system model is evaluated by studying the effect of the stocks level threshold on the long term average global costs using discrete-event simulation and then validated using comparison with a regression model.