Double-supplier reverse logistics system that considers shortages and quality uncertainty of recycled products

Abstract

As concerns over the environment increase, many companies have started to consider waste reduction, to which end the production of recyclable and reusable items, as well as product recovery, are crucial. Since the literature on inventory management with return flows seldom discusses shortages and uncertainties in the quality of recycled products, this study develops a model of reverse logistics that considers shortages and provides a means of preventing them. The proposed model includes a complete inspection to reduce uncertainty in the quality of recycled products, making the model more realistic. Backorders, inventory levels of returned items and the number of orders for newly procured items are determined and the effects of the parameters on the optimal solution are observed by performing a sensitivity analysis.