Designing Three-Stage Reverse Logistics Network with Incentive

Due to the environmental protection and the remaining economical value in the used products, this paper presents a three-stage reverse logistics network problem with incentive payment and formulates a mixed-integer nonlinear facility location model to determine the optimal number and locations for collecting centers and reprocessing centers so as to minimize the total cost. Since this problem is NP-hard, we propose a tabu search (TS) and genetic algorithm (GA) hybrid algorithm. The TS is applied to solve the sub-problems of 1st stage and the GA to solve the sub-problem of 2nd stage and 3rd stage. The performance of the proposed solution method has been demonstrated with computational experimentation.