Heuristic procedure for the economic lot-sizing problem with remanufacturing and recovery targets

We address a production-remanufacturing planning problem of a single item with recovery targets stated as a lower bound on the numbers of returns that must be remanufactured. This problem can arise in practice if there are legal or market pressures. We show that this problem extension can be considered a generalization of the traditional problem without recovery targets, which is a well-known NP-hard problem even for the cost structure considered in this paper. A polynomial-time heuristic procedure is suggested, with different criteria for determining the periods with positive remanufacturing, which results in two different variants of the heuristic. To evaluate the heuristic, we extend a benchmark set of large instances of the literature in order to include different cost and recovery target settings. The results obtained from the numerical experiment allow us to conclude that the heuristic is cost- and time-effective for many scenarios of cost and recovery targets. However, the performance of the heuristic decreases as recovery targets increase. In addition, we note that our heuristic is able to achieve an optimal solution for many instances, even with a higher remanufacturing rate than the optimal solution obtained by a commercial solver.