SIMULTANEOUS CONSIDERATION OF PRODUCT DESIGN AND END-OF-LIFE RECOVERY NETWORK DESIGN

In recent years, product recovery has become a great concern to manufacturers who take the responsibility for product end-of-life decisions. Product design and reverse logistics network design are the major determinants of recovery profit, and each is related to the other. Thus, in order to evaluate the recovery profit and eventually maximize it, an integrated approach must be developed so that both product and network design are considered concurrently at the product design stage. In this paper, a generic mathematical model for optimizing recovery network design is proposed that reflects the impact of product design during network optimization by using a transition matrix. It provides not only the optimal network design but also the optimal recovery plan for a large number of products as well as the expected recovery profit of that plan. The proposed model is expected to provide the optimal solution that corresponds well to a real problem. For the purpose of validation and verification, the proposed approach was applied to a simulated cellular phone recovery case.