A multicriteria decision making model for reverse logistics using analytical hierarchy process

Product recovery activities such as recycling, refurbishing and direct reuse are becoming integral to manufacturing supply chains. This study presents a multicriteria decision making model for reverse logistics using analytical hierarchy process (AHP). The AHP model evaluates a hierarchy of criteria and subcriteria, including costs and business relations, for critical decisions regarding network design. Using sensitivity analysis with AHP, the work provides insights into the preference ordering among eight alternative network configurations. For instance, the choice of test sites is largely dependent on the potential for cost savings on testing procedures and transportation of scrap, and this decision is not sensitive to the importance of business relations. By contrast, the choice of collection sites is largely determined by the relative importance of business relations considerations vs. cost considerations. As well, the processing location decision favors a third‐party reprocessor if there is little need to protect proprietary product knowledge and cost savings is very important. The model is demonstrated using three case studies of real‐world applications.