EOQ inventory models for disassembly systems with disposal and lost sales

The economic order quantity (EOQ) for disassembly systems consists of determining quantities of a products to disassemble at different times over an infinite planning horizon. As for basic EOQ settings, the demands for the product components are known, continuous and constant and the sum of ordering, operation and inventory costs has to be minimised. Despite the diversity of EOQ-related literature, there is no model that applies directly to disassembly. Three new EOQ models for disassembly systems are proposed in this paper. Two level product structures are considered with demands for the components. In this context, each disassembly operation leads to unnecessary inventories when the demands are not balanced. The proposed models integrates decisions for the management of the inventory surplus by allowing disposal operations and lost sales. The models with disposal orders use integer multipliers to model the coordination between disassembly and disposal orders. The detailed analysis of each model shows however that simple inventory policies allow avoiding the inventory surplus. The models with lost sales show that the policy is different from the one obtain in the single item EOQ model. Solution methods to determine the parameters of the policies are provided and illustrated.