REVERSE LOGISTICS NETWORK DESIGN: A SIMULATED ANNEALING APPROACH

Abstract

Environmental concerns, competition, economic factors, etc. motivates both academicians and practitioners to study on reverse logistics activities. Reverse logistics contains activities such as product returns, recycling, substitution, reuse, disposal, refurbishment, repair and remanufacturing. Product returns constitutes an important portion in total company costs. A company can take competitive advantage with cost reductions in product returns in terms of transportation, inventory and warehousing costs. Determining convenient quantities and location places for centralized return centers is an important decision in reverse logistics networks. In this paper, a simulated annealing (SA) approach is proposed for this decision making area.