Reverse logistics network design model based on e‐commerce

Abstract

PurposeThe aim of this paper is to study reverse logistics network design in order to better facilitate the location of factories, online retailers, and the third party logistics in the context of e‐commerce.Design/methodology/approachDrawing on types of third party collections of returned products, the paper proposes a 0‐1 mixed integrate linear programming (0‐1MILP) mathematic model for reverse logistics networks in e‐business and a further mathematical model is discussed in relation to determining the market demands and returns. Furthermore, a case study is developed and described with the intention of illustrating the value of this model and network.FindingsThe paper identifies possibilities for the application of the reverse logistics network models to deal with returned products from customers in companies using e‐business.Research limitations/implicationsThere is scope for future research to build on the present research and consider further factors in relation to the influences on return logistics.Originality/valueThis paper provides novel insights for e‐companies setting up and operating a reverse logistics network. The application of these models could decrease costs and allow optimal decisions on price and return price in order to increase efficiency and profit levels.