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Supply Chain Network Design Based on Integration of Forward and Reverse Logistics

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  • Pradip K. Bhaumik

Abstract

This article describes a mathematical model for the design of supply chain network for a company that sells its products through a set of retail stores that integrates both the movement of fresh products and the returns from the customers. Specifically, the company faces a situation where, given the location and demand from the set of retail stores, it wishes to decide where to locate the warehouses (or distribution centres) and test centres and the routes to be used in transporting the fresh products from warehouses to stores, returned products from stores to test centres and finally, re-stockable returned products from test centres to warehouses. This is formulated as a binary integer linear programming problem. The problem is solved using LINGO and then, an analysis is performed to determine the sensitivity of the optimal solution to different parameters, including sales volumes, return rates, costs of operation and transportation and the various prices.

Suggested Citation

  • Pradip K. Bhaumik, 2015. "Supply Chain Network Design Based on Integration of Forward and Reverse Logistics," Global Business Review, International Management Institute, vol. 16(4), pages 680-699, August.
    • Handle: RePEc:sae:globus:v:16:y:2015:i:4:p:680-699
    DOI: 10.1177/0972150915581114
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    References listed on IDEAS

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