Document Type

Article

Publication Version

Accepted Manuscript

Publication Date

11-2010

Journal or Book Title

Stochastic Models

Volume

26

Issue

4

First Page

549

Last Page

593

DOI

10.1080/15326349.2010.519665

Abstract

We consider a closed-loop supply chain where new products are produced to order and returned products are refurbished for reselling. The solution to aprice-setting problem enforces the heavy traffic condition, under which we address the production rate control problem for two types of cost functions. Wesolve a drift-control problem for an approximate system driven by a correlated two-dimensional Brownian motion. The solutions to this system are then used to obtain asymptotically optimal control policies. We also conduct a numerical study to explore the effects of different parameters on the optimal production rates and the resulting costs.

Comments

The Version of Record of this manuscript has been published and is available in Stochastic Models 2010, http://www.tandfonline.com/10.1080/15326349.2010.519665. Posted with permission.

Copyright Owner

Taylor and Francis Inc.

Language

en

File Format

application/pdf

Published Version

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