Designing an integrated logistics network in a supply chain system

Abstract

Many companies spend significant amounts of money and time on reverse logistics which mainly deal with transporting and handling returned products. Therefore, efficient management of return products is an urgent and interesting issue facing the companies. This paper presents a facility location problem of the integrated logistics network aiming to improve the efficiency of both forward and reverse logistics. Three types of facilities are identified: Warehouses (forward logistics), collection centers (reverse logistics) and hybrid facilities (both forward and reverse logistics). Instead of the traditional static problem, the paper proposes a nonlinear mixed integer model addressing the dynamic integrated forward and reverse distribution network design problem for 3PLs (Third Party Logistics Providers). A bi-objective model is developed to minimize the total shipping cost and time simultaneously. An example is tested to evaluate the model.