2021/03/17 by Zhicheng Zhu, Zhu, Zhicheng, Yisha Xiang +5
Business, Management and Accounting · Decision Sciences · Energy · #Energy, Environment, and Transportation Policies #FOS: Mathematics #Multi-Criteria Decision Making #Optimization and Control (math.OC) #Sustainable Supply Chain Management
paper · pdf · doi:10.48550/arxiv.2103.09901
openalex publication_date 2021/03/17 · openalex created_date 2025/10/10 · openalex updated_date 2026/07/28
We consider the problem of remanufacturing planning in the presence of statistical estimation errors. Determining the optimal remanufacturing timing, first and foremost, requires modeling of the state transitions of a system. The estimation of these probabilities, however, often suffers from data inadequacy and is far from accurate, resulting in serious degradation in performance. To mitigate the impacts of the uncertainty in transition probabilities, we develop a novel data-driven modeling framework for remanufacturing planning in which decision makers can remain robust with respect to statistical estimation errors. We model the remanufacturing planning problem as a robust Markov decision process, and construct ambiguity sets that contain the true transition probability distributions with high confidence. We further establish structural properties of optimal robust policies and insights for remanufacturing planning. A computational study on the NASA turbofan engine shows that our data-driven decision framework consistently yields better worst-case performances and higher reliability of the performance guarantee