Title: Simple price-driven Reverse Logistics system with entropy and exergy costs

Authors: Mohamad Y. Jaber; Ahmed M.A. El Saadany; Marc A. Rosen

Addresses: Department of Mechanical and Industrial Engineering, Ryerson University, Toronto, ON M5B 2K3, Canada. ' Department of Mechanical and Industrial Engineering, Ryerson University, Toronto, ON M5B 2K3, Canada. ' Faculty of Engineering and Applied Science, University of Ontario Institute of Technology, Oshawa, ON L1H 7K4, Canada

Abstract: This paper contributes to an emerging research area of non-classical inventory management that postulates that the behaviour of production systems very much resembles those of physical systems. It applies classical thermodynamics reasoning to modelling inventory systems to reduce system entropy (or disorder). This paper also introduces the concept of exergy (useful energy) cost, which represents here the amount of useful work wasted (exergy destroyed) because of system entropy. First, this paper modifies the Economic Order Quantity (EOQ) model to account for exergy and entropy costs. Second, the modified EOQ model is used to develop and investigate a simple Reverse Logistics (RL) model. Third, this paper assumes forward and backward commodity flows to be price dependent and therefore a profit approach is adopted. A new model is developed with numerical examples presented and results discussed.

Keywords: EOQ; economic order quantity; reverse logistics; thermodynamics; entropy costs; exergy costs; inventory management; modelling; system entropy.

DOI: 10.1504/IJEX.2011.043921

International Journal of Exergy, 2011 Vol.9 No.4, pp.486 - 502

Received: 04 Nov 2010
Accepted: 16 Jun 2011
Published online: 01 Dec 2011 *

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