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Supply Chain Network Design Based on Integration of Forward and Reverse Logistics

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  • Pradip K. Bhaumik

Abstract

This article describes a mathematical model for the design of supply chain network for a company that sells its products through a set of retail stores that integrates both the movement of fresh products and the returns from the customers. Specifically, the company faces a situation where, given the location and demand from the set of retail stores, it wishes to decide where to locate the warehouses (or distribution centres) and test centres and the routes to be used in transporting the fresh products from warehouses to stores, returned products from stores to test centres and finally, re-stockable returned products from test centres to warehouses. This is formulated as a binary integer linear programming problem. The problem is solved using LINGO and then, an analysis is performed to determine the sensitivity of the optimal solution to different parameters, including sales volumes, return rates, costs of operation and transportation and the various prices.

Suggested Citation

  • Pradip K. Bhaumik, 2015. "Supply Chain Network Design Based on Integration of Forward and Reverse Logistics," Global Business Review, International Management Institute, vol. 16(4), pages 680-699, August.
    • Handle: RePEc:sae:globus:v:16:y:2015:i:4:p:680-699
    DOI: 10.1177/0972150915581114
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    References listed on IDEAS

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    1. Srivastava, Samir K., 2008. "Network design for reverse logistics," Omega, Elsevier, vol. 36(4), pages 535-548, August.
    2. V. Daniel R. Guide , Jr. & Gilvan C. Souza & Luk N. Van Wassenhove & Joseph D. Blackburn, 2006. "Time Value of Commercial Product Returns," Management Science, INFORMS, vol. 52(8), pages 1200-1214, August.
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    4. Min, Hokey & Jeung Ko, Hyun & Seong Ko, Chang, 2006. "A genetic algorithm approach to developing the multi-echelon reverse logistics network for product returns," Omega, Elsevier, vol. 34(1), pages 56-69, January.
    5. Fleischmann, Moritz & Bloemhof-Ruwaard, Jacqueline M. & Dekker, Rommert & van der Laan, Erwin & van Nunen, Jo A. E. E. & Van Wassenhove, Luk N., 1997. "Quantitative models for reverse logistics: A review," European Journal of Operational Research, Elsevier, vol. 103(1), pages 1-17, November.
    6. Barros, A. I. & Dekker, R. & Scholten, V., 1998. "A two-level network for recycling sand: A case study," European Journal of Operational Research, Elsevier, vol. 110(2), pages 199-214, October.
    7. V Jayaraman & V D R Guide & R Srivastava, 1999. "A closed-loop logistics model for remanufacturing," Journal of the Operational Research Society, Palgrave Macmillan;The OR Society, vol. 50(5), pages 497-508, May.
    8. Jayaraman, Vaidyanathan & Patterson, Raymond A. & Rolland, Erik, 2003. "The design of reverse distribution networks: Models and solution procedures," European Journal of Operational Research, Elsevier, vol. 150(1), pages 128-149, October.
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