A decision making model to maximise the value of reverse logistics in the computer industry

This paper examines the viability of reverse logistics by developing a decision making model for manufacturers in deciding under what conditions they should consider reverse logistics to maximise profit. It focuses on computer industry with actors consisting of the manufacturer, its suppliers, channels and repair depots to form the reverse logistics network. A mathematical model is developed to assess the viability of reverse logistics operations: one part of the model examines the make parts either for repair, repackage or scrap and the other part of the model examines buy parts for exchange or credit with supplier. Data collected from a computer company were used to validate the model. The results from the model indicate that reverse logistics can be profitable if the return volume is high and the returns are reused, repaired but not disposed of.