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Operational Research in Reverse Logistics: Some Recent Contributions

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Abstract

The recovery of used products and materials is receiving growing attention as a result of depleted landfill and incineration capacities. From a logistical point of view these reuse opportunities give rise to a goods flow from the user back to the sphere of the producers. “Reverse logistics” is concerned with the management of this “reverse” goods flow. In this paper issues in reverse logistics are addressed from an operational research perspective. Recent contributions related to the areas of distribution planning and inventory management are discussed, and compared with traditional logistical settings.

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... eam ( Rogers & Tibben - Lembke , 2001 , p . 130 ) . Figure 1 and 2 illustrate simple FSCM and RSCM . Although SCM embraces both FSCM and RSCM , more attention has been paid to FSCM than to RSCM . The need and importance of RSCM , however , has grown and became popular with the rising concern for environmental issues of a " throw - away society " ( Dekker et al . , 1998 , p . 141 ) . For instance , Norek ( 2003 ) found that the overall value of returned goods is estimated to be around $ 43 billion per year , representing an average of 15% - 20% of all goods sold . He also pointed out that this can be improved by 10 to 15% by using the right supply chain process , such as proper supplier selection , imp ...
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Inventory systems with returns are systems in which there are units returned in a repairable state, as well as demands for units in a serviceable state, where the return and demand processes are independent. We begin by examining the control of a single item at a single location in which the stationary return rate is less than the stationary demand rate. This necessitates an occasional procurement of units from an outside source. We present a cost model of this system, which we assume is managed under a continuous review procurement policy, and develop a solution method for finding the policy parameter values. The key to the analysis is the use of a normally distributed random variable to approximate the steady-state distribution of net inventory.Next, we study a single item, two echelon system in which a warehouse (the upper echelon) supports N(N ⩾ 1) retailers (the lower echelon). In this case, customers return units in a repairable state as well as demand units in a serviceable state at the retailer level only. We assume the constant system return rate is less than the constant system demand rate so that a procurement is required at certain times from an outside supplier. We develop a cost model of this two echelon system assuming that each location follows a continuous review procurement policy. We also present an algorithm for finding the policy parameter values at each location that is based on the method used to solve the single location problem.
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The paper addresses a problem of product recovery management where a single product is stocked in order to fulfill a stochastic demand of customers who may return products after usage, thus generating also stochastic product returns. The material flow can be controlled by procuring new products on the one hand, and by remanufacturing or disposal of returned items on the other. A situation is considered where all costs are proportional and where remanufacturing as well as procurement needs a fixed deterministic leadtime which can be different for both activities. For periodic review control it is shown how the optimal decision rules for procurement, remanufacturing and disposal can be evaluated by exploiting the functional equations of a dynamic programming formulation. The serious impact of leadtimes on the complexity of the control rule is elaborated, and it is demonstrated for which leadtime situations simple optimal policies can be derived.
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In this paper we consider a stochastic inventory system with production, remanufacturing, and disposal operations. Customer demands must either be fulfilled from the production of new products or by the remanufacturing of used products. Used products are either remanufactured or disposed of. To coordinate production, remanufacturing and disposal operations efficiently, we extend the PUSH and PULL strategies that Van der Laan et al. developed to control a system in which all returned products are remanufactured and no planned disposals occur. The other contributions of this paper are to indicate when and why planned disposals are economically beneficial, and to compare the PUSH-disposal strategy to the PULL-disposal strategy. In addition, we investigate the robustness of the control parameters of the PUSH- and PULL-disposal strategy over the different stages of a product life-cycle.
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Environmental legislation and customer expectations increasingly force manufacturers to take back their products after use. Returned products may enter the production process again as input resources. Material management has to be modified accordingly.One of the areas concerned is inventory management. The present paper provides a step towards a systematic analysis of inventory control in the context of reuse. A basic inventory model is presented comprising Poisson demand and returns. For this model, an optimal control policy is derived and optimal control parameters are computed. Moreover, a numerical analysis is provided of the impact of the return-flow on the inventory system. Comparison with traditional (s,Q)-inventory models is central throughout the analysis.
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Thesis (doctoral)--Erasmus Universiteit Rotterdam, 1997.
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Closed-loop supply chain management is the extension of forward supply chains with a reverse supply chain (reverse logistics) and is concerned with the integration of key business processes to create additional value for all players in the forward and the reverse supply chain. Traditional supply chains aim at optimization of customer service and costs until the point of sales; closed-loop supply chains adopt a "cradle-to-grave" approach. In this thesis, the focus is on the design of reverse supply chains for end-of-life products, in particular end-of-life vehicles. For long-term success of end-of-life management, more economic stimuli are needed than is currently the case. Legislation as a single driving force is insufficient for companies to achieve closed loop supply chains. The key issue is to find eco-efficient solutions, i.e. design and operate an economically low cost network without violating applicable targets imposed by environmental legislation. In this thesis, a case study research methodology is adopted to develop design principles for network design and assess the consequences on the operations research models. Three case studies, which stem from the network of Auto Recycling Nederland, are described in detail.
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A new version of the vehicle routing problem with backhauls is presented. In this new problem backhauls are not restricted to be visited once all linehaul customers have been served, neither are backhaul customers fully mixed with linehaul customers. In this problem the user based on his or her experience, the vehicle capacity, the type of products and the type of vehicle used, can define the position along a route from which the first backhaul customer may be visited. An insertion-type heuristic is put forward for this class of problems. An analysis of the improvement in route cost obtained by allowing a relaxation in the restriction of the mix of linehaul and backhaul customers is reported.
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In this paper we consider a single-product, single-echelon production and inventory system with product returns, product remanufacturing, and product disposal. For this system we consider three different procurement and inventory control strategies i.e., the (sp, Qp, sd,N) strategy, the (sp, Qp, sd) strategy, and the (sp, Qp, N) strategy. The control parameters in these strategies relate to the inventory position at which an outside procurement order is placed (sp), the inventory position at which returned products are disposed of (sd), the outside procurement order quantity (Qp), and the capacity of the remanufacturing facility (N). For each of the strategies we derive exact expressions of the total expected costs as functions of the control parameters. Main objective of this paper is to compare the performance of each of the alternative strategies with respect to costs, under different system conditions.
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In the Netherlands, the recycling of construction waste and in particular of sand creates an important logistic problem. New legislation ensures that disposal is reduced to a minimal level and this incentives recycling. Such measures cause an increase on the offer of sand (a subproduct of recycling construction waste) and create the need for establishing an efficient sand network. The sand problem falls into the field of reverse logistics management since it deals with processing returned goods (sieved sand). We propose a two-level location model for the sand problem and consider its optimization using heuristic procedures. The results obtained for the sand recycling network in the Netherlands are summarized.
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This article surveys the recently emerged field of reverse logistics. The management of return flows induced by the various forms of reuse of products and materials in industrial production processes has received growing attention throughout this decade. Many authors have proposed quantitative models taking those changes in the logistics environment into account. However, no general framework has been suggested yet. Therefore the time seems right for a systematic overview of the issues arising in the context of reverse logistics. In this paper we subdivide the field into three main areas, namely distribution planning, inventory control, and production planning. For each of these we discuss the implications of the emerging reuse efforts, review the mathematical models proposed in the literature, and point out the areas in need of further research. Special attention is paid to differences and/or similarities with classical ‘forward’ logistics methods.
Managing repairable item inventory systems: a review, TIMS Studies in the Management Sciences
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Production planning and inventory control for remanufacturable durable products Lead time effects in push and pull controlled manufacturing/remanufacturing systems The travelling salesman problem with pick-up and delivery
  • Van Laan
  • E A Salomon
  • M R Dekker
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A two-level network for recycling sand: a case study Matching material requirements and availabilities in the context of recycling: an MRP-I based heuristic
  • References Barros
  • A I Dekker
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Distributielogistiek en retourstroomoptimalisatie
  • M Sawmon
  • M Thierry
  • J Van Hillegersberc
  • J A E E Van Nunen
  • L N Van Wassenhove
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Matching material requirements and availabilities in the context of recycling: an MRP-I based heuristic
  • S D P Flapper
FLAPPER, S.D.P. (1994) Matching material requirements and availabilities in the context of recycling: an MRP-I based heuristic, in: Proceedings of the Eighth international Working Seminar on Production Economics, Vol. 3, p. 511-519 (Innsbruck, Igls).