This paper describes the economic lot sizing problems with remanufacturing and final

disposal options to minimize the sum of inventory costs. Basically lot sizing determines the
production plan by minimizing all involved costs such as holding, variable and inventory
costs. Comparing with the traditional economic lot size problem (ELSP), demands can be
satisfied by recovering used items returned to the origin. However, problems arises when
remanufactured products are downgraded which may cause inferior market price compared to
the new ones. Pineyro and Viera studied and proposed a set of inventory policies whereby
remanufacturing used items is more suitable than disposing them off and producing new
items. Since demand requirements must be achieved within a certain time frame, the returned
items are not sufficient to meet the demand thus focusing on remanufacturing products.
Among the possible solution is to allow substitution of new products to replace
remanufactured products, is to possibly maintain the selling price and to avoid potential
customers from fleeing. Different initial inventory values, cost configuration and lead time
are taken into consideration to derived optimal policies as economic lot size remanufacturing
(ELSR) is still a new problem.


The main objective of this paper is to amount to produce, remanufacture and dispose in
planning horizon such that all demands are satisfied, thus minimizing the sum of all involved
costs.