A markov decision model to evaluate outsourcing in reverse logistics

摘要: One of the most important decisions regarding reverse logistics (RL) is whether to outsource such functions or not, due fact that RL does not represent a production distribution firm's core activity. To explore hypothesis outsourcing more suitable when returns are variable, we formulate and analyse Markov decision model decision. The reward function includes capacity operating costs either performing internally them transitions among states reflect both sequence taken simple characterization random pattern over time. We identify sufficient conditions on cost parameters return fraction guarantee existence an optimal threshold policy for outsourcing. Under mild assumptions, this likely be crossed, higher uncertainty in returns. A numerical example illustrates even when...