Integration of closed loop distribution supply chain network and 3PRLP selection for the case of battery recycling

Abstract

The increased use of lead acid batteries in automotive vehicles will increase the demand for lead and to meet this increasing demand used batteries are identified as a most important source of lead through recycling. Since recycled lead is a costly commodity, the market potential for reclaiming the secondary lead from the used batteries has been growing. For this purpose, a multi-echelon, multi-product closed loop distribution supply chain (CLDSC) network is designed and integrated with the selection process of best third-party reverse logistics provider (3PRLP) to achieve cost efficiency and delivery schedules in reverse logistics. A fuzzy multi-criteria decision-making (FMCDM) model based on the VIKOR method is used for the selection of best 3PRLP. To optimise the proposed network, a mixed integer linear programming model is developed and solved using LINGO 8.0 optimisation software package for the case of battery recycling and decisions are made regarding raw material procurement from the supplier, production, distribution and amount of reclaimed/recycled material. Since the main aim of this study is to optimise the CLDSC network, the supply chain cost of the forward distribution supply chain network is found and compared with the total supply chain cost of the CLDSC network and the results show that a cost reduction can be achieved in the case of CLDSC network. Finally, model experiments for varying rate of returns are conducted to study the percentage of cost savings.