Inventory management of remanufacturable products

We address the procurement of new components for recyclable products in the context of Kodak's single-use camera. The objective is to find an ordering policy that minimizes the total expected procurement, inventory holding, a nd lost sales cost. Distinguishing characteristics of the system are the un certainty and unobservability associated with return flows of used cameras. We model the system as a closed queueing network, develop a heuristic proc edure for adaptive estimation and control, and illustrate our methods with disguised data from Kodak. Using this framework, we investigate the effects of various system characteristics such as informational structure, procure ment delay, demand rate, and length of the product's life cycle.