Redesign of reverse logistics network with managerial decisions on the minimum quality level and remanufacturing policy

Abstract

In reverse logistic networks, end-of-use products are collected and transported to the factory for remanufacturing. The economic and environmental values of a reverse network depend significantly on the quality of the end-of-use products and the remanufacturing policies. Therefore, it is desirable to consider the minimum quality level of the remanufacturing and the remanufacturing policy during the initial design stage. A redesign of the reverse logistics network is addressed based on decisions made regarding the location of the collection facility, the allocation, the minimum quality level and the remanufacturing policies. Based on the known continuous distribution for the quality of an end-of-use product, a bi-objective mathematical model was developed. A mathematical model was then transformed into mixed integer programmes using quadratic terms in the constraints through the development of a discretisation method. To obtain Pareto solutions of a bi-objective model, a quality constraint method was developed by relaxing the non-linearity and complexity of the original epsilon constraint method. The proposed mathematical model and algorithm were able to redesign reverse logistics network throughout the entire processes of collection, transportation and remanufacturing. The validity of the model and accessibility for a large size problem demonstrated through numerical experiments are described herein.