Reverse logistics facility location using cyclical model of extended MRP theory

Grubbström’s well‐developed MRP Theory has been mostly used in modeling production processes. Global supply chains also contain distribution, consumption and recycling processes. For this reason theory was recently further extended to incorporate all kinds of activities. Such extended model, which consists of four main sub‐systems, is closed and can be used for several detailed analyses. Since the importance of reverse logistics is increasing, this paper will focus on parameters which determine Net Present Value of the whole system, depending on geographical location of recycling facilities. We will show how lead times, transportation costs, setup costs and price of labor and energy of individual location contribute to overall NPV of the system.