We focus on the concave-cost version of a production planning problem where a manufacturer can meet demand by either producing new items or by remanufacturing used items. Unprocessed used items are disposed. We show the NP-hardness of the problem even when all the costs are stationary. Utilizing the special structure of the extreme-point optimal solutions for the minimum concave-cost problem with a network flow type feasible region, we develop a polynomial-time heuristic for the problem. Our computational study indicates that the heuristic is a very efficient way to solve the problem as far as solution speed and quality are concerned.
All Science Journal Classification (ASJC) codes
- Modeling and Simulation
- Ocean Engineering
- Management Science and Operations Research
- Production planning