A multi-period facility location-allocation decision on collection and reprocessing of used products

• Main Authors: Ordonez, David Jonathan L., Pua, Florence G.
• Format: text
• Language: English
• Published: Animo Repository 2012
• Subjects: Industrial ecology; Industrial Engineering
• Online Access: https://animorepository.dlsu.edu.ph/etd_bachelors/5552
• Institution: De La Salle University

Over the years, simply dumping the End-of-Life products in landfills is no longer a viable solution. A reverse supply chain is used to limit this growing problem. Collection and reprocessing are the two main activities in this reverse supply chain. However to do this, one should address the important issues on how to secure the supply and where to locate the facilities are the considered when doing these activities. Hence, the needed for relevant network designs. While numerous studies have been on the field of reverse logistics and the generic supply chain network, current studies have not considered interaction of some important cost parameters on the location-allocation of collection and reprocessing facilities considering deterministic demand and supply with the multi-period decision of opening and closing a facility that would yield the best network design. This study aims to develop a network design for used products such as paper, ink cartridges and tires. A multi-period cost minimization model is developed with the objective function that includes collection cost, reprocessing cost, transportation cost, fixed annual cost, capital expenditure, penalty cost and salvage value savings. System parameters include capacity, percentage disposal & discount factor. Constraints included are flow constraints, capacity constraints, and opening, closing and assigning constraint. The issue on how to secure the supply and where to locate the facilities are the important aspects considered when doing these activities. Study aims to develop a network design for used products such as paper, ink cartridge and tires. These issues are tackled in detail in this study and how authors have addressed these issues and the gaps between their studies. In the system, a different party handles the collection and reprocessing of used products. Having said this, the main objective of the system is to satisfy the demand requirement which is set by the client. This is why a reverse supply chain is considered. Using General Algebraic Mathematical Model System (GAMS), the model is validated and to ensure the model behave as expected. In determining the significant cost parameters of the system, a sensitivity analysis is done. The analysis is performed using Design of Experiment (DOE). It shows that the capital expenditure, fixed operating cost and the transportation cost are significant with respect to the behavior of the total cost. Moreover, interaction between the capacity and penalty cost proves to be significant which affects the location-allocation decision of the system. This because, the larger the capacity the system has, the larger penalty cost it will incur. But findings suggest that the system tends to choose large size facilities compared to smaller size facilities because of behavior of demand. The model has suggested that decision makers should choose a single large facility when demand is viable and vice versa. Moreover, a strategic location should be considered where distances between facilities and demand point is minimal. But transportation cost is inversely proportional to the capital expenditure and fixed cost. With this, it is the manager’s cost is inversely proportional to the capital expenditure and fixed cost. With this, it is the manager’s choice on whether to put up a facility that has low investment cost compared to higher transportation cost. Suggestions for future include having a multi-product system where activities in the reprocessing may vary and added cost may be incurred, the quality of used product, the environmental impact, service time in terms of reprocessing and delivery,and the integration of other concepts of supply chain which includes inventory and routing decisions.