Modeling an Aerospace Manufacturing/Remanufacturing System

As demand for spare parts increases, airlines and private aircraft owners put more pressure on aftermarket service providers to reduce their prices. Also, increasing environmental concerns, the cost of raw materials, and... [ view full abstract ]

As demand for spare parts increases, airlines and private aircraft owners put more pressure on aftermarket service providers to reduce their prices. Also, increasing environmental concerns, the cost of raw materials, and government regulations for conservation of energy and natural resources, landfill reduction, pollution reduction, and creating high quality new jobs , have resulted in companies striving to reduce their waste materials. Remanufacturing is one of the approaches used to achieve these goals. Remanufacturing is “a process of recapturing the value added to the material when a product was first manufactured”.
In this study, a mathematical programming model is proposed to formulate a closed-loop network where remanufacturing of customer owned components and transforming of defective components are allowed. Each product is made by assembling different components. Defective components could be sent for repairs or transforming. At each overhaul or repair stage, the product is disassembled, components are cleaned and inspected. Components in good condition are put back to products (subject to approval of regulating authorities) and defective components are classified as: repairable, scrap, or suitable to be remanufactured. The model gives priority to spare component demand, that is, at each period demand for new and used spare components are satisfied first. If there are not enough used components, new components will be acquired. It is only then that production of final products starts from assembling the remaining new components. The model allows backlog in assembly of new products. Inventory of new and used components is measured at the end of each period. The objective is to maximize total profit, which is the revenue generated from the sale of final products, new spare components, used spare components, and revenue from repair and remanufacturing of customer owned components, minus the cost of manufacturing, repairs, remanufacturing, transforming and the corresponding set-up costs as well as inventory carrying costs and scrap costs. Inspection cost is considered as part of the processing cost. Assembly cost, material handling cost, and new product packaging cost are included in the aggregated cost. Major constraints are for set-up decision of each process; linking products and components; inventory level of components; linking defects and processes; as well as production capacity. Limited outsourcing is allowed for remanufacturing of customer owned disassembled components. A scenario-based analysis is conducted considering varying remanufacturing lead-time as well as various defect rates of disassembled components. Further analysis is conducted to reveal insight on effect of input variations on profit and amount of scraps.
Some of the findings are: 1) Inventory carrying cost per unit has a major effect on inventory cost but does not change inventory level (in units) significantly; 2) Increase in the cost of outsourced remanufacturing has the highest effect on profit, but does not change variables significantly; 3) increase in the upper bound of outsourced remanufacturing has a significant effect on variables.