A location-allocation problem applying in scrap steel recycling network design

In recent years, quantities of steel production in countries all over the world are increasing fast. However many developing countries advance their steel production at the expense of consuming mass of iron ore, coke, and sacrificing environment. Standing on the point of environment protection and natural resource saving, many experts appeal that the iron and steel industry should exert itself to utilize less iron ore, and more scrap steel instead. Realizing advantages and essentiality of using scrap steel, it is necessary to find out some feasible methods to estimate whether and how manufacturers can get profit from recycling and what the impact factors are. As a matter of fact, whether recycling scrap steel can increase the profit of a steel-making facility heavily depends on how effective reverse logistics operate. In this paper, we establish a closed-loop supply chain aiming at illustrating the whole business in the iron and steel industry from steel-making to scrap steel recycling. Then focusing on the reverse chain, we further explain some base-knowledge of scrap steel and analyze characteristics of its recycling more detailed. Finally we formulate a location-allocation model only considered for the obsolete scrap steel recycling which is a branch of the reverse chain on the condition of multi-collection centers and multi-consumer zones.