THE IMPACT OF PRODUCT RECOVERY ON LOGISTICS NETWORK DESIGN

TLDR

Closed‑loop supply chains need appropriate logistics structures to handle used and recovered product flows. The study examines logistics network design for reverse logistics. A generic facility‑location model is introduced and used to analyze how product return flows alter logistics networks compared to traditional settings. The impact of product recovery is highly context‑dependent, fitting existing structures in many cases but sometimes requiring a comprehensive redesign of the network.

Abstract

Efficient implementation of closed‐loop supply chains requires setting up appropriate logistics structures for the arising flows of used and recovered products. In this paper we consider logistics network design in a reverse logistics context. We present a generic facility location model and discuss differences with traditional logistics settings. Moreover, we use our model to analyze the impact of product return flows on logistics networks. We show that the influence of product recovery is very much context dependent. While product recovery may efficiently be integrated in existing logistics structures in many cases, other examples require a more comprehensive approach redesigning a company's logistics network in an integral way.