A forward and reverse logistics shipment planning model

Many supply chains contain both forward and reverse logistics flows where forwarders are often asked to manage forward and reverse logistics activities in a cost-efficient manner. Reverse logistics jobs are different from forward logistics jobs, apart from the physical movement directions, and they have different logistics service requirements that usually require special facility setups. The choice of reverse logistics centres is also an important cost saving factor in a supply chain network. We consider cost saving activities through combining transportation activities and logistics activities in forward and reverse logistics jobs. A mixed 0-1 LP model is proposed to solve the shipment planning problem and the choice of reverse logistics centre. Managerial issues in implementation are discussed in an illustrative case.