We discuss five areas of
inventory model, including reusable raw material, EPQ model, optimization,
random planning horizon and present value. In the traditional EPQ model, the
stock-holding cost of raw material was not counted as a part of relevant cost.
We explored the possibility of reducing a company’s impact on the environment and increasing their competitiveness
by recycling their repair and waste disposal. The products are manufactured
with reusable raw material. Our analysis takes into account the time value, and
the present value method is applied to determine the optimal inventory policies for reusable items with random planning
horizon. Results show how the
heuristic approach can achieve global optimum. Numerical examples are given to validate
the proposed system.
Cite this paper
S. Su, S. Lin and L. Chang, "The Optimal Inventory Policy for Reusable Items with Random Planning Horizon Considering Present Value," Applied Mathematics
, Vol. 5 No. 2, 2014, pp. 292-299. doi: 10.4236/am.2014.52030
 K. Richter, “The Extended EOQ Repair and Wasted Disposal Model with Variable Setup Number,” European Journal of Operational Research, Vol. 96, No. 2, 1996, pp. 313-324. http://dx.doi.org/10.1016/0377-2217(95)00276-6
 K. Richter and I. Dobos, “Analysis of the EOQ Repair and Waste Disposal Problem with Integer Setup Numbers,” International Journal of Production Economics, Vol. 45, No. 1-3, 1999, pp. 443-447. http://dx.doi.org/10.1016/0925-5273(95)00143-3
 K. Richter, “The Extended EOQ Repair and Wasted Disposal Model,” International Journal of Production Economics, Vol. 59, No. 1-3, 1996, pp. 463-467. http://dx.doi.org/10.1016/S0925-5273(98)00110-8
 R. Kleber, S. Ninner and G. P. Kies Muller, “A Continuous Time Inventory Model for a Product Recovery System with Multiple Options,” International Journal of Production Economics, Vol. 79, No. 2, 2002, pp. 121-141. http://dx.doi.org/10.1016/S0925-5273(02)00256-6
 S. G. Koh, H. Hwang and C. S. Ko, “An Optimal Ordering and Recovery Policy for Reusable Items,” Computers and Industrial Engineering, Vol. 43, No. 1-2, 2002, pp. 59-73. http://dx.doi.org/10.1016/S0360-8352(02)00062-1
 I. Konstantaras and S. Papachristos, “Note on: An Optimal Ordering and Recovery Policy for Reusable Items,” Computers and Industrial Engineering, Vol. 55, No. 3, 2008, pp. 729-734. http://dx.doi.org/10.1016/j.cie.2008.02.007
 I. Karakayali, H. Emir-Farinas and E. Akcali, “Pricing and Recovery Planning for Demanufacturing Operations with Multiple Used Products and Multiple Reusable Components,” Computers and Industrial Engineering, Vol. 59, No. 1, 2010, pp. 55-63. http://dx.doi.org/10.1016/j.cie.2010.02.016
 M. K. Salameh and A. N. El-Kassar, “Accounting for the Holding Cost of Raw Material in the Production Model,” Proceeding of BIMA Inaugural Conference, Sharjah, 17-18 March 2007, pp. 72-81.
 A. N. El-Kassar, M. Salameh and M. Bitar, “EPQ Model with Imperfect Quality Raw Material,” Mathematica Balkanica, Vol. 26, 2012, pp. 123-132.
 F. W. Harris, “What Quantity to Make at Once,” The Library of Factory Management, Operation and Costs, A. W. Shaw Company, Chicago, Vol. V, 1915, pp. 47-36.
 E. W. Taft, “The Most Economical Production Lot,” The Iron Age, Vol. 101, May 30 1918, pp. 1410-1412.
 I. Moon and W. Yun, “An Economic Order Quantity Model with a Random Planning Horizon,” The Engineering Economist, Vol. 39, No. 1, 1993, pp. 77-86. http://dx.doi.org/10.1080/00137919308903113
 R. R. Trippi and D. E. Lewin, “A Present Value Formulation of the Classical EOQ Problem,” Decision Sciences, Vol. 5, No. 1, 1974, pp. 30-35. http://dx.doi.org/10.1111/j.1540-5915.1974.tb00592.x
 Y. H. Kim, C. C. Philippatos and K. H. Chung, “Evaluating Investments in Inventory Systems: A Net Present Value Framework,” The Engineering Economist, Vol. 31, No. 2, 1986, pp. 119-136. http://dx.doi.org/10.1080/00137918608902931
 K. J. Chung and S.-D. Lin, “A Note on the Optimal Cycle Length with a Random Planning Horizon,” The Engineering Economist, Vol. 40, No. 4, 1995, pp. 385-392. http://dx.doi.org/10.1080/00137919508903162