Reverse logistics network design under extended producer responsibility: The case of out-of-use tires in the Gran Santiago city of Chile

Abstract

This paper seeks to describe several features of the reverse logistics network design under extended producer responsibility, in which the collection goals and penalties for the management system are established by a regulatory legal framework. To address this design network challenge, the paper develops a mixed integer linear programming model for capacitated facility location, which meets recycling targets and minimize the cost of fines in case of infeasibility, through relaxation of constraints. Consequently, the optimal flows, the configuration of collection, reprocessing and recycling facilities, and the estimation of the monetary transfers necessary for the feasible operation of the optimal management system are computed. To illustrate the usefulness of the proposed model, a numerical example based on the case of out-of-use tires (OUT) in the Gran Santiago city of Chile is considered. Forty-two scenarios are defined by a specific offer of OUT for the year 2020 and a possible ratio of OUT to be collected in the reverse logistic network imposed by the authorities. The obtained results show the optimal sets of service center, collection centers and reprocessing plants for each scenario, allowing to study the maximum benefit/minimum investment to develop a management system under the EPR national law.