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The Incremental Cost Matrix Procedure for Locating Repair Service Centers in Multinational Reverse Logistics

Chen, Hsin Min    (Department of Business Management National United University   ); Hsieh, Chih Kuang    (Department of Business Management National United University   ); Wu, Ming Cheng    (Graduate Institute of Industrial Management National Central University   ); Luo, Shin Wei    (Graduate Institute of Management National United University  );
  • 초록

    This study provides a heuristic algorithm to solve the locating problem of repair service centers (RSCs). To enhance the customer service level with more satisfaction and quicker responsiveness, the locating problem of RSCs has become one of the important issues in reverse supply chain management. This problem is formulated as a zero-one mixed integer programming in which an exiting distributor will be considered to be an un-capacitated repair service center for the objective of cost-minimizing. Since logistical costs are highly interrelated with the multinational location of distributors and RSCs, the fixed cost for setting a repair service center, variable cost, transportation cost, and exchange rates are considered in this study. Recognizing the selection of un-capacitated RSCs' locations is a combinatorial optimization problem and is a zero-one mixed integer programming with NP-hard complexity, we provide a heuristic algorithm named as incremental cost matrix procedure (ICMP) to simplify the solving procedure. By using the concise and structural cost matrix, ICMP can efficiently screen the potential location with cost advantage and effectively decide which distributor should be a RSC. Results obtained from the numerical experiments conducted in small scale problem have shown the fact that ICMP is an effective and efficient heuristic algorithm for solving the RSCs locating problem. In the future, using the extended ICMP to solve problems with larger industrial scale or problems with congestion effects caused by the variation of customer demand and the restriction of the RSC capacity is worth a further investigation.


  • 주제어

    Locating Problem .   Repair Service Centers .   Multinational Reverse Logistics.  

  • 참고문헌 (9)

    1. Amini, M. M., Retzlaff-Roberts, D., and Bienstock, C. C. (2005), Designing a Reverse Logistics Operation for Short Cycle Time Repair Services, International Journal of Production Economics, 96, 367-380 
    2. Silva, A. D. and Abramson, D. (1998), A Parallel Interior Point Method and Its Application to Facility Location Problems, Computational Optimization and Applications, 9, 249-273 
    3. Vaidyanathan, J., Patterson, R. A., and Rolland, E. (2003), The Design of Reverse Distribution Networks: Models and Solution Procedures, European Journal of Operational Research, 150, 128-149 
    4. Fleischmann, M., Bloemhof-Ruwaard, J. M., Dekker, R., and van der Laan, E. et al. (1997), Quantitative Models for Reverse Logistics: A Review, European Journal of Operational Research, 103, 1-17 
    5. Hiraki, S., Ichimura, T., and Ishii, K. (2008), Designing of a global logistics system for the ICGCPS under considering overseas markets, Industrial Engineering and Management Systems, 7, 189-196 
    6. Blumberg, D. F. (1999), Strategic Examination of Reverse Logistics and Repair Service Requirements, Needs, Market Size, and Opportunities, Journal of Business Logistics, 20, 141-159 
    7. Sridharan, R. (1995), The Capacitated Plant Location Problem, European Journal of Operational Research, 87, 203-213 
    8. Tibben-Lembke, R. S. (1998), The Impact of Reverse Logistics on the Total Cost of Ownership, Journal of Marketing Theory and Practice, 6, 51-66 
    9. Ball, M. O. and Lin, F. L. (1995), Reliability, Covering and Balanced Matrices, Operations Research Letters, 17, 1-7 

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