A bi-objective reverse logistics network analysis for post-sale service

Reverse logistics, induced by various forms of return, has received growing attention throughout this decade. Reverse logistics network design is a major strategic issue. This paper addresses the analysis of reverse logistic networks that deal with the returns requiring repair service. A problem involving a manufacturer outsourcing to a third-party logistics (3PLs) provider for its post-sale services is proposed. First, a bi-objective optimization model is developed. Two objectives, minimization of the overall costs and minimization of the total tardiness of cycle time, are addressed. The facility capacity option at each potential location is treated as a discrete parameter. The purpose is to find a set of non-dominated solutions to the facility capacity arrangement among the potential facility locations, as well as the associated transportation flows between customer areas and service facilities. Then, a solution approach is designed for solving this bi-objective optimization model. The solution approach consists of a combination of three algorithms: scatter search, the dual simplex method and the constraint method. Finally, computational analyses are performed on trial examples. Numerical results present the trade-off relationship between the two objectives. The numerical results also show that the optimization for the first objective function leads to a centralized network structure; the optimization for the second objective function results in a decentralized network structure.