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Modelling and analysis for sequentially optimising production, maintenance and delivery activities taking into account product returns

This paper develops and analyses a stochastic optimisation problem with a service level constraint for generating a sequentially optimal plan of production, maintenance and delivery activities in a deteriorating manufacturing system. Stochastic demand along with product returns are both assumed the latter of which allows for restocking products returned by the customer which are still new and thus in saleable condition. A constrained production/maintenance/delivery problem with service level, stochastic demand, delivery time, failure rate and product returned is formulated based on quadratic model. This quadratic formulation is adapted to provide an inventory, delivery, production and maintenance policies. The objective of this paper is to study the delivery time influence on the planning of the production, maintenance and delivery activities. Finally, we present simulation results to illustrate the exploitation of the proposed approach.