A case study on collection network design, capacity planning and vehicle routing in reverse logistics

Abstract

This paper reports a case study on designing and operating a Korean municipal refuse collection system. Refuse collection, one of indispensable activities in reverse logistics, is the activity that gathers end-of-use/life products and moves them to the facilities where further recovery or disposal is done. The case problem consists of two sub-problems: (a) collection network design and capacity planning that determines the locations and capacities of collection points as well as the allocations of demand points to the opened collection points over a given planning horizon and (b) vehicle routing that determines the number and routes of vehicles in such a way that each collection point must be visited exactly once by one vehicle starting and terminating at the depot. The case problems were solved using the two tabu search (TS) algorithms, hierarchical and integrated algorithms, adopted from the previous theoretical study, and the results show that the algorithms give much better solutions than the conventional method in terms of the sum of fixed and variable costs. Also, as in the previous theoretical study, of the two TS algorithms, the integrated approach outperforms the hierarchical algorithm significantly.