Reverse Logistics Network Design with Centralized Return Center

Abstract

Natural resources and landfills have been overused and exhausted, resulting in the necessity of product recovery. Today, as a growing number of producers engage in product recovery, the need for efficient reverse logistics networks has become more significant than ever.

An optimization modeling approach is used to develop a generic integrated forward and reverse logistics network for a firm involved in product recovery. The proposed modeling framework demonstrates and compares the performance of centralized return centers (CRC) and conventional collection centers in the reverse logistics network. Several case studies are used to analyze the sensitivity of the network structures and performances to various modeling parameters including product return ratio, product disposition ratios, and processing and handling costs at collection centers. Lastly, recommendations are made to remove model limitations and improve reverse logistics network models.