An optimal remanufacturing centre selection algorithm for reverse logistics alliance

Abstract

Reverse logistics has been an emerging field both in academic as well as in applied research since last two decades because of increasing consumer awareness, legislative initiatives and profits associated with reuse of products or components. The costs associated with reverse logistics are usually high and these need to be minimized. The current study focuses on the formulation of alliance for cost reductions in reverse logistics. Remanufacturing, refurbishing, repair, cannibalization and reuse are the processes which add value to the reverse logistics system and are capable of converting it into a profitable venture. Used products contribute a cheaper source of components and spares required to remanufacture a product because of the less costs associated with the labor and material resources when compared with the manufacturing of new parts or products. When a defective part is removed from a product or assembly, it can be restored to its original state of functionality. Instead of purchasing a new, the same can be restored from repair/remanufacture centre just replacing defective part with a new part or spare. Furthermore, for manufacturers to reduce investments in reverse logistics, the formations of alliance and sharing of facilities for remanufacturing can lead to more profitability. In this study a focus has been made for the formation of remanufacturing alliance and an algorithm has been formulated for the selection of optimal remanufacturing center for the reverse logistics alliance. A case company has been selected from emerging Chinese electronic manufacturing industry. The case has been solved by using data set of the selected company with the help of formulated algorithm. © Maxwell Scientific Organization, 2013.