Abstract
This paper presents a dynamic stochastic optimization model to manage the remanufacturing system facing the uncertainties in demand, recycle quantity, and remanufacturing yield. In this model, two product types are remanufactured from a recycled core common component to satisfied high-end and low-end demand. There are three inventory types in the system. They are core common component, high-end finished product and low-end finished product. In each period, manager has to observe each type of the inventories and decides how many core common components to recycle, how many high-end and low-end products to remanufacture, and how many high-end and low-end products to sell under different market conditions to maximize profit. The performance of dynamic policy is compared against two common practices. How different uncertainties impact the decisions and system performances are also discussed.