The design of reverse distribution networks: Models and solution procedures

Reverse distribution, or the management of product return flows, induced by various forms of reuse of products and materials, has received growing attention throughout this decade. In this paper we discuss reverse distribution, and propose a mathematical programming model for a version of this problem. Due to the complexity of the proposed model, we introduce a heuristic solution methodology for this problem. The solution methodology complements a heuristic concentration procedure, where sub-problems with reduced sets of decision variables are iteratively solved to optimality. Based on the solutions from the sub-problems, a final concentration set of potential facility sites is constructed, and this problem is solved to optimality. The potential facility sites are then expanded in a greedy fashion to obtain the final solution. This “heuristic expansion” was also performed using the solution found with a greedy heuristic to provide a short-list of potential facility sites. Computational tests demonstrate a great deal of promise for this solution method, as high-quality solutions are obtained while expending modest computational effort.