Surplus Inventory Matching in the Process Industry

A typical problem in the steel industry concerns the allocation of orders to leftover surplus stock ([71]). The problem of matching unique customer requirements to existing inventory is termed the surplus inventory matching problem. The surplus stock arises because orders maybe canceled after units are produced, because produced units are below acceptable quality levels, or because surplus units had been intentionally created to reduce customer lead times. While this problem is described from the context of steel mills and paper mills, the problem can be framed in a more general form, e.g., as dealing with leftover trucking capacity or production capacity. 

As sustainability becomes an important supply chain attribute, manufacturers are being forced to find mechanisms to reuse or recycle used products. We have considered examples of reuse (Kodak cameras, returned clothing and donated T-shirts) and recycling (Dupont s silver and Home Depots pallets). The supply chain and product design have to be organized to manage the Four Cs of the return flows effectively. The return flows impact choices of participants in the supply chain (retailers or the 

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