Redesigning an integrated forward-reverse logistics system for a third party service provider: an empirical study

This paper models the logistics business for a large third party service provider and incorporates both forward and reverse product flows for the company. The model that we propose in this paper incorporates price, transportation mode and outsourcing cost. We compare our model with a reduced model that was obtained from past literature and show through Monte Carlo simulation the superiority of the full model in profit generation for the third party service provider. The full model considers multiple transportation modes across the forward and reverse logistics network based on the firm's business structure, whereas the reduced model has only one transportation option from point to point. Additionally, the full model allows for an option to outsource remanufacturing unlike the reduced model that does not permit such outsourcing options. One of the major contributions of this paper is a thorough analysis through the incorporation of pricing and transportation mode of an integrated forward and reverse logistics supply chain.