A location-routing problem with economic efficiency for recycling system

Abstract

The demand for rare resources used for high-tech products has been increased due to growing populations and industrial developments. Since it becomes more likely to cause resource depletion in the future, a requirement for resource circulation, e.g., recycling, reuse, and reproduction, becomes large. In order to realize sustainable recycling, the systems considering minimizing a transportation cost of a cyclical form supply chain and forecast of the resources to collect needs to be designed. However, if the recycling systems are not economically inefficient, the firm might not implement the project. Therefore, it is important to evaluate the economic efficiency of the supply chain systems. In this paper, we evaluate an economic value of a sustainable recycling system on closed loop supply chain based on a location-routing problem.The recycling system is composed of supply chain by facilities, which remove parts having resources from waste products and the others reproducing resources from the parts. Since the demand of automobile increase due to global innovations and inventions, we consider automobile motors and neodymium as target of parts that have resources. In this analysis, the waste amount of automobile and motor is forecasted by means of multiple regression method and Weibull distribution. By using the forecasting waste amount, a recycling equipment place is determined by minimizing a transportation and recycling equipment costs. We evaluate an economic efficiency for the sustainable recycling system, that is, a present value of recycling equipment and neodymium from solutions of the location-routing problem.