Control of a production-inventory system with product returns dependent on customer demand
Résumé
This paper considers a production-inventory system with capacity constraint and product returns. The system is modeled by an M/M/1 make-to-stock queue. Demands are Poisson distributed and are lost if unsatisfied. We aim to study the assumption commonly made in which demands and product returns are independent of each another. For this purpose, we first suppose that returns are independent from demands. Secondly, we consider an explicit correlation between returns and demands. For both models, we consider base-stock policies and we compute analytically the average cost of such policies. Finally, a numerical study investigates the costs for ignoring correlation between demand and product returns.