An optimization model for sustainable solutions towards implementation of reverse logistics under collaborative framework

Abstract

Enforced Legislations, social image, corporate citizenship and market competence are forcing manufacturing enterprises (MEs) to incorporate reverse logistics (RL) into their supply chains. RL can be used as a strategic tool to gain customer loyalty and reduce operational costs by maximizing recovery from used products. MEs face many issues which hinder successful implementation of RL such as lack of government support, financial limitations, capabilities and facilities, and market constraints. The situation is worse in case of MEs in developing countries and hence the collaboration of all its stakeholders is essential for handling the issue. Some earlier studies focused on investigating these issues and their solutions from company’s perspective without considering the role of the channel partners . To overcome this gap, this study proposes a collaborative framework for MEs which includes identifying the sustainable solutions for implementation of RL, prioritizing the solutions as per their importance and designing and optimizing a RL network based on the most important solutions identified. Decision Making Trial and Evaluation Laboratory (DEMATEL) approach is employed to understand the mutual relationships among the solutions and extract the most imperative solutions. The paper presents a linear programming problem for the RL network developed under a collaborative framework which aims to maximize the total sustainable impact in the planning horizon. The focus of the study is to optimally utilize the profit accrued from the returned products to generate funds for the NGO and company employees. A numerical illustration of the Indian electronic and electrical industry is presented to validate the proposed study.