A reverse logistics network design

The area of reverse logistics (RL) has recently received considerable attention, due to a combination of environmental, economic and social factors. Reverse logistics refers to the series of operations that initiate at the consumer level with the collection of products and terminate with the re-processing of these products at remanufacturing facilities. In the current work, we propose a mixed-integer linear program (MILP) to address the complex network configuration of an RL system, which decides on the optimal selection of sites, the capacities of inspection centers and remanufacturing facilities. Furthermore, we introduce important transportation considerations, by providing the option of using in-house fleet as well as outsourcing option and this constitutes one of the main contributions of our work. In addition, we take into account the initial investment, which limits investments to be made on fleet or center expansion in subsequent time periods. The model is tested on a real-life case and results are reported. The current work holds significant practical implications, as it can provide useful insights to decision makers from both governmental and private entities regarding important strategic decisions pertaining to the design of reverse supply chains.