Multi-period reverse logistics network design

The configuration of the reverse logistics network is a complex problem comprising the determination of the optimal sites and capacities of collection centers, inspection centers, remanufacturing facilities, and/or recycling plants. In this paper, we propose a profit maximization modeling framework for reverse logistics network design problems. We present a mixed-integer linear programming formulation that is flexible to incorporate most of the reverse network structures plausible in practice. In order to consider the possibility of making future adjustments in the network configuration to allow gradual changes in the network structure and in the capacities of the facilities, we consider a multi-period setting. We propose a multi-commodity formulation and use a reverse bill of materials in order to capture component commonality among different products and to have the flexibility to incorporate all plausible means in tackling product returns. The proposed general framework is justified by a case study in the context of reverse logistics network design for washing machines and tumble dryers in Germany. We conduct extensive parametric and scenario analysis to illustrate the potential benefits of using a dynamic model as opposed to its static counterpart, and also to derive a number of managerial insights.     

A warehouse-based design model for reverse logistics

In this paper, an MILP formulation is proposed for the design of a reverse logistics network based on a warehouse location–allocation model, which optimizes, simultaneously, the forward and reverse networks. A single product model with unlimited capacity is first defined. Subsequently, the model is extended to a multi-product capacitated recovery network model, where capacity limitations and a multi-product system can be considered. The proposed model is compared to published work in the field, where different model assumptions have been proposed. Two cases are described so as to gain a better insight into the model and allow a comparative analysis.     

A dynamic pricing approach for returned products in integrated forward/reverse logistics network design

During the last decade, the stringent pressures from environmental and social requirements have spurred an interest in designing a reverse logistics network. In this paper, we address the problem of designing and planning a multi-echelon, multi-period, multi-commodity and capacitated integrated forward/reverse logistics network. Returned products are categorized with respect to their quality levels, and a different acquisition price is offered for each return type. Furthermore, the reservation incentive of customers, the expected price of customers for one unit of used product described by uniform distribution, is applied to model the customers’ return willingness. Due to the fact that the remaining worthwhile value in the used products is the corporation’s key motivation for buying them from customers, a dynamic pricing approach is developed to determine the acquisition price for these products and based on it determine the percentage of returned products collected from customer zones. The used products’ acquisition prices at each time period are determined based on the customers’ return willingness by each collection center.     

An optimization model for the design of a capacitated multi-product reverse logistics network with uncertainty

In this work the design of a reverse distribution network is studied. Most of the proposed models on the subject are case based and, for that reason, they lack generality. In this paper we try to overcome this limitation and a generalized model is proposed. It contemplates the design of a generic reverse logistics network where capacity limits, multi-product management and uncertainty on product demands and returns are considered. A mixed integer formulation is developed which is solved using standard B&B techniques. The model is applied to an illustrative case.     

An integrated model for logistics network design

In this paper we introduce a new formulation of the logistics network design problem encountered in deterministic, single-country, single-period contexts. Our formulation is flexible and integrates location and capacity choices for plants and warehouses with supplier and transportation mode selection, product range assignment and product flows. We next describe two approaches for solving the problem---a simplex-based branch-and-bound and a Benders decomposition approach. We then propose valid inequalities to strengthen the LP relaxation of the model and improve both algorithms. The computational experiments we conducted on realistic randomly generated data sets show that Benders decomposition is somewhat more advantageous on the more difficult problems. They also highlight the considerable performance improvement that the valid inequalities produce in both solution methods. Furthermore, when these constraints are incorporated in the Benders decomposition algorithm, this offers outstanding reoptimization capabilities.     

An integrated approach for collection network design,capacity planning and vehicle routing in reverse logistics

This study considers network design, capacity planning and vehicle routing for collection systems in reverse logistics. The network design and capacity planning problems are to determine the static locations and capacities of collection points as well as the dynamic allocations of demand points to the opened collection points over a planning horizon, and the vehicle routing problem is to determine the number and routes of vehicles in such a way that each collection point must be visited exactly once by one vehicle starting and terminating at the depot while satisfying the return demands at collection points and the vehicle capacity. The objective is to minimize the sum of fixed costs to open collection points and to acquire vehicles as well as variable costs to transport returns at demand points to the opened collection points and travel the opened collection points by vehicles. Unlike the location-routing problems, the integrated problem considered in this study has several features: multi-period dynamic model, capacity planning for collection points, maximum allowable collection distances, etc. To solve the integrated problem, two types of tabu search algorithms, hierarchical and integrated ones, are suggested, and their test results are reported. In particular, the efficiency of the integrated approach is shown by comparing the two algorithm types.     

Service network design models for two-tier city logistics

This paper focuses on two-tier city logistics systems for advanced management of urban freight activities and, in particular, on the first layer of such systems where freight is moved from distribution centers on the outskirts of the city to satellite platforms by urban vehicles, from where it will be distributed to customers by a different fleet of dedicated vehicles. We address the issue of planning the services of this first tier system, that is, select services, their routes and schedules, and determine the itineraries of the customer-demand flows through these facilities and services. We propose a general scheduled service network design modelling framework that captures the fundamental concepts related to the definition of urban-vehicle tactical plans within a two-tier distribution network. We examine several operational assumptions regarding the management of the urban-vehicle fleet and the flexibility associated with the delivery of goods, and show how the proposed modelling framework can evolve to represent an increasing level of detail. A discussion of algorithmic perspectives completes the paper.     

Reverse logistics network design for product recovery and remanufacturing

Due to environmental concerns, reverse logistics now is becoming an important strategy to increase customer satisfaction. This research develops a generic mixed integer nonlinear programming model (MINLP) for reverse logistics network design. This is a multi-echelon reverse logistics model. It maximizes total profit by handling products returned for repair, remanufacturing, recycling, reuse, or incineration/landfill. A hybrid genetic algorithm (GA) is proposed to solve the problem. The designed model is validated and tested by using a real-life example of recycling bulk waste in Taoyuan City, Taiwan. Sensitivity analyses are conducted on various parameters to illustrate the capabilities of the proposed model. Post-optimality analysis and comparison show that the proposed model performs better than current reverse logistic operations and the proposed hybrid GA demonstrates the efficiency of solving the complex reverse logistics problem.     

Fuzzy chance-constrained programming model for a multi-echelon reverse logistics network for household appliances

Efficient planning and design of an appropriate reverse logistics network is crucial to the economical collection and disposal of scrapped household appliances and electrical products. Such systems are commonly modelled as mixed-integer programs, whose solutions will determine the location of individual facilities that optimize material flow. One of the major drawbacks of current models is that they do not adequately address the important issue of uncertainty in demand and supply. Another deficiency in current models is that they are restricted to a two-echelon system. This study addresses these deficiencies by embodying such uncertainties in the model using the technique of fuzzy-chance constrained programming, and by extending the model to a three-echelon system. A heuristic in the form of a hybrid genetic algorithm is then employed to generate low-cost solutions. The overall objective is to find economical solutions to the general problem of determining the volume of appliances to be moved between the three echelons of customer base to collection sites, collection sites to disposal centres and disposal centre to landfill centre/remanufacturing centre; and to the problems of positioning the disposal centres and the landfill centre/remanufacturing centres within the problem domain. A case example in China is presented and the quality and robustness of the solutions are explored through sensitivity analysis.     

Combined location and routing problems for designing the quality-dependent and multi-product reverse logistics network

With a growing awareness of carbon footprints and their impact on environmental degradation, many firms hope to streamline their reverse logistics (RL) operations involving end-of-use products. However, managing end-of-use products can be extremely challenging due to inherent complexity involved in the collection, sorting, transhipment, and processing of these products. Despite numerous challenges, the efficient handling of these products can be a source of competitive advantages. In this regard, a plastic recycling industry in Southern India is no exception. This industry often copes with the problem of picking up recyclable plastic bottles using private collecting agents, transferring those bottles to the initial collection points (ICPs), and then transhipping and consolidating them at the centralized return centres (CRCs) for final shipments to the processing centres where these bottles were treated for recycling. This problem can be further complicated with the dilemma of finding the most ideal locations of ICPs and CRCs and the optimal routing of vehicles serving ICPs and CRCs such that the total RL cost is minimized. To aid the industry in dealing with such RL problems, we developed a mathematical model and then evaluated the performances of that model with the actual data obtained from a case study of the Indian company. Given a lack of efforts in combining the location-routing problem with the balanced allocation problem in the closed-loop supply chain network, the main contribution of this paper includes the simultaneous consideration of location, allocation, and routing decisions. In addition, this paper is one of the first to consider incentive payments, the quality level of products, and multiple types of products.     

Multi-period capacity expansion for a local access telecommunications network

In this paper, we examine a multi-period capacity expansion problem for a local access telecommunications network with a tree topology. Capacity expansion is realized through the installation of concentrators at the nodes and cables on the links of the network. Clearly, the installation of concentrators reduces the need for additional cables, and conversely. The goal is to find the least cost alternative to satisfy the demand. A heuristic approach is proposed to solve this problem, where local installation decisions at each node are propagated in the network. This information is then used to adjust prices that guide the decision process from one iteration to the next, until a fixed point is reached. Numerical results are reported on problem instances based on different cost and demand structures.     

Reverse logistics network design and planning utilizing conditional value at risk

Nowadays, due to some social, legal, and economical reasons, dealing with reverse supply chain is an unavoidable issue in many industries. Besides, regarding real-world volatile parameters, lead us to use stochastic optimization techniques. In location–allocation type of problems (such as the presented design and planning one), two-stage stochastic optimization techniques are the most appropriate and popular approaches. Nevertheless, traditional two-stage stochastic programming is risk neutral, which considers the expectation of random variables in its objective function. In this paper, a risk-averse two-stage stochastic programming approach is considered in order to design and planning a reverse supply chain network. We specify the conditional value at risk (CVaR) as a risk evaluator, which is a linear, convex, and mathematically well-behaved type of risk measure. We first consider return amounts and prices of second products as two stochastic parameters. Then, the optimum point is achieved in a two-stage stochastic structure regarding a mean-risk (mean-CVaR) objective function. Appropriate numerical examples are designed, and solved in order to compare the classical versus the proposed approach. We comprehensively discuss about the effectiveness of incorporating a risk measure in a two-stage stochastic model. The results prove the capabilities and acceptability of the developed risk-averse approach and the affects of risk parameters in the model behavior.     

A stochastic bi-objective location model for strategic reverse logistics

In this paper we propose a comprehensive model for reverse logistics planning where many real-world features are considered such as the existence of several facility echelons, multiple commodities, choice of technology and stochasticity associated with transportation costs and waste generation. Moreover, we adopt a bi-objective model for the problem. First, the cost for building and operating the network is to be minimized. Second, the obnoxious effect caused by the reverse network facilities is also to be minimized. A two-stage stochastic bi-objective mixed-integer programming formulation is proposed, in which the strategic decisions are considered in the first stage and the tactical/operational decisions in the second one. A set of different scenarios is considered, and the extensive form of the deterministic equivalent problem is presented. This model is tested with a case study based on some data from the Spanish province of Cordoba. Nondominated solutions are obtained by combining the two different objectives and by using a general solver.     

Improving organisational performance through reverse logistics

Reverse logistics involves several activities that, based on decisions on how to implement and use them, seriously affect and impact the performance of an organisation. This paper analyses how different activities of reverse logistics could affect costs, and thus the performance of the organisation. The study is based on a survey of companies of the Spanish market and applies a structural model. The analysis provides evidence that: (1) based on the type of an activity, reverse logistics has different cost; therefore, it is important to select the most appropriate combination and implementation of reverse logistics activities. (2) Reverse logistics activities affect reverse logistics cost, and thus it decisively determines organisational performance. A number of implications and contributions stems from the discussion and conclusions of the study.     

Hierarchical facility network planning model for global logistics network configurations

This paper presents a novel hierarchical network planning model for global logistics (GLs) network configurations. The proposed method, which is based on the fundamentals of integer programming and hierarchical cluster analysis methods, determines the corresponding locations, number and scope of service areas and facilities in the proposed GLs network. Therein, a multi-objective planning model is formulated that systematically minimizes network configuration cost and maximizes both operational profit and the customer satisfaction rate. Particularly, potential risk-oriented costs, such as macro-environmental-risk and micro-operational-risk costs are considered in the proposed model. Numerical results indicate that the overall system performance can be improved by up to 11.52% using the proposed approach.     

Reliable design of a logistics network under uncertainty: A fuzzy possibilistic-queuing model

This paper proposes a bi-objective model for designing a reliable network of bi-directional facilities in logistics network under uncertainties. For this purpose, the model utilizes an effective reliability approach to find a robust logistics network design. The objectives of the model are to minimize the total costs and the expected transportation costs after failures of bi-directional facilities of the logistics network. To solve the model, a new solution approach is proposed by combining queuing theory, fuzzy possibilistic programming and fuzzy multi-objective programming. Finally, the computational experiments are provided to illustrate the effectiveness of the proposed model and solution approach.     

A new multi-criteria scenario-based solution approach for stochastic forward/reverse supply chain network design

Analyzing current trends in supply chain management, lead to find unavoidable steps toward closing the loop of supply chain. In order to expect best performance of Closed-Loop Supply Chain (CLSC) network, an integrated approach in considering design and planning decision levels is necessary. Further, real markets usually contain uncertain parameters such as demands and prices of products. Therefore, the next important step is considering uncertain parameters.