Supply planning for a closed loop system with uncertain demand and return

Date of Award


Publication Type

Master Thesis

Degree Name



Industrial and Manufacturing Systems Engineering

First Advisor

Zhang, Guoqing (Industrial & Manufacturing Systems Engineering)


Engineering, Industrial.



Creative Commons License

Creative Commons Attribution-Noncommercial-No Derivative Works 4.0 License
This work is licensed under a Creative Commons Attribution-Noncommercial-No Derivative Works 4.0 License.


This proposed model considers a supply network consisting of a manufacturer, its external suppliers, and a remanufacturing facility. The manufacturer, facing an uncertain market demand and return, has two options for supplying parts: either ordering the required parts to external suppliers or remanufacturing used products and bringing those back to 'as new' conditions. We propose a general framework for this multi product, closed loop system and develop a non-linear programming (NLP) model to maximize the total expected profit by optimally deciding quantity of parts to be remanufactured and quantity of parts to be purchased from external suppliers. We solved the mathematical model using two different solution techniques to find optimal or near optimal solution values. With a numerical example we compared the results from both solution techniques and introduced sensitivity analysis to illustrate the interacting effects among critical parameters in the model.