An Operational Model of Closed-loop Logistics Based on the End-customer´s Willingness

In a closed-loop logistics, the reverse logistics is a supply-driven flow. The amount of returned products is affected by the end-customer´s willingness, and the end-customer´s willingness is affected by the reclaiming price. This supply-driven flow creates a great deal of uncertainty of the quantity, timing and quality of used-products. This paper presents a new operational model (Model-I) of closed-loop logistics to minimize the total operational cost. In this model, the end-customer´s willingness to return used-products and the uncertainty of used-products quality are taken into account. An illustration is presented to demonstrate the feasibility of the proposed approach. Comparing with the Model-II, numerical results indicate that the operational cost can be saved about 10,000-25,000$ a year by using the proposed Model-I, and the recoverable ratio higher, the amount of saved-cost larger