Inventory model for empty container reposition problem considering quality dependent returns and port capacity constraint

Abstract

In this study, an Economic Return Quantity (ERQ) model for the Empty Container Reposition (ECR) problem using the reverse logistics (RL) approach is developed. Some of the model’s primary considerations are the return rate that depends on the quantity and quality of the empty container, and the capacity constraints to hold the empty container in the port. The model of ERQ is optimized using an analytical approach. Based on the result of the hypothetical case, the authors examined that the acceptable quality level of reusable containers should be set at 67%, 55%, and 50% for the three types of containers to be able to obtain minimum inventory costs. Two cases of binding and nonbinding constraints are investigated, and it is found that the binding constraint gives 3.4% higher cost than the latter. The results of this study help the container depots to plan, manage, and handle empty containers so that the container utility can be increased, and inventory costs can be minimized.