International Journal of Production Research

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Optimised redesign of reverse logistics network

with multi-level capacity choices for household
appliances

Ada Che, Jieyu Lei & Zhibin Jiang

To cite this article: Ada Che, Jieyu Lei & Zhibin Jiang (2021): Optimised redesign of reverse
logistics network with multi-level capacity choices for household appliances, International Journal of
Production Research, DOI: 10.1080/00207543.2021.1967499

To link to this article: https://doi.org/10.1080/00207543.2021.1967499

Published online: 01 Sep 2021.

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INTERNATIONAL JOURNAL OF PRODUCTION RESEARCH
https://doi.org/10.1080/00207543.2021.1967499

Optimised redesign of reverse logistics network with multi-level capacity choices

for household appliances
Ada Chea , Jieyu Leia and Zhibin Jianga,b
a School of Management, Northwestern Polytechnical University, Xi’an, People’s Republic of China; b Antai College of Economics and
Management, Shanghai Jiao Tong University, Shanghai, People’s Republic of China

ABSTRACT ARTICLE HISTORY

Reverse logistics networks reintroduce end-of-life products to remanufacturing, which is significant Received 25 November 2020
for sustainable development and environmental protection. In this paper, we investigate the current Accepted 14 July 2021
reverse logistics network of household appliances in China and redesign a new network that intro- KEYWORDS
duces necessary facilities: disassembly centres and three types of remanufacturing plants to improve Reverse logistics network
recycling rates. A mixed-integer linear programming model with multi-level capacity choices is redesign; facility location;
proposed to determine the locations and capacities for disassembly centres and remanufacturing capacity choices;
plants. An efficient decomposition-and-expansion heuristic is developed to solve the model. The mixed-integer programming;
redesigned network is evaluated using a real case. The results indicate that the recycling rate is decomposition-and-
largely improved by the new network in which almost all useful materials can be recycled, whereas, expansion
in the traditional network, only metals are efficiently recycled. A sensitivity analysis of model param- heuristic
eters is conducted using the Taguchi method to identify their effects on recycling decisions. The
proposed algorithm is further evaluated using a set of randomly generated instances. The results
show that the algorithm can yield high-quality solutions within a short time. The best configuration
of the algorithm is suggested via sensitivity analysis of parameters using the generated instances.

1. Introduction
Rapid technological innovation leads to many house-
hold appliances being quickly replaced by new prod-
ucts. The increasing number of end-of-life household
appliances has attracted considerable attention in reverse
logistics network design. According to the Beijing Con-
sumer Association, about 7 billion household appliances
were used in China in 2018. With the purchase of new
products, over 20 million end-of-life household appli-
ances need to be recycled every year. These end-of-
life products are rich in valuable materials that can
be widely reused in manufacturing (Park et al. 2006;
Li et al. 2021). An efficient reverse logistics network
plays a significant role in improving the recycling rate
while reducing the negative influence on the environ-
ment (Pishvaee, Farahani, and Dullaert 2010; Lu et al.
2021). Five household products are on the recycling
list for their large quantities and high values, includ-
ing TVs, computers, air conditioners, refrigerators, and
washing machines. In recent years, more electronic prod-
ucts are being considered for addition to the recycling
list.
Traditional reverse logistics networks for household
appliances in China consists of two-echelon facilities:
collection centres and smelters, as shown in Figure 1(a).
Collection centres collect various end-of-life household
appliances from cities to obtain valuable metal materials;
smelters reprocess materials that can be reused in man-
ufacturing. Although most metals can be recycled by the
network, some materials such as plastic and glass are still
poorly treated because of insufficient disassembly at the
collection centres and the shortage of remanufacturing
plants.
To improve the recycling performance, we redesign
the reverse logistics network, as shown in Figure 1(b),
which introduces disassembly centres, plastic plants, and
glass plants into the traditional network. In the new net-
work, collection centres collect end-of-life various house-
hold appliances from cities and send them to disassem-
bly centres. Disassembly centres sort these products and
allocate them in different disassembly lines. In general,
three disassembly lines are included in a disassembly cen-
tre: television/computer, refrigerator/air conditioner, and
washing machine disassembly lines. End-of-life house-
hold products are separated into metals, plastics, and
glass pieces via these disassembly lines; then, they are
delivered to smelters, plastic plants, and glass plants for
further treatments.

CONTACT Zhibin Jiang zbjiang@sjtu.edu.cn

© 2021 Informa UK Limited, trading as Taylor & Francis Group
2 A. CHE ET AL.
Figure 1. Traditional (a) and redesigned (b) reverse logistics network of household appliances in China.
Disassembly centres and various remanufacturing
plants play an important role in improving the recy-
cling rate (Tang, Zhou, and Caudill 2001). Disassem-
bly centres break end-of-life products into materials.
Researchers focus on various disassembly problems such
as disassembly sequence, disassembly line balancing, and
lot-sizing disassembly problem (Guo et al. 2018; Zhao
et al. 2018; Guo, Zhou, Abusorrah, et al. 2020; Guo,
Zhou, Liu, et al. 2020; Guo et al. 2021). Remanufacturing
plants reprocess materials and reuse them in produc-
tion. Researchers pay attention to various problems on
reprocessing planning, remanufacturing scheduling, and
marketing strategy (Polotski, Kenne, and Gharbi 2017;
Lechner and Reimann 2020; Shi et al. 2021). We consider
both disassembly centres and remanufacturing plants in
the redesigned network. The key issue is to determine
their best locations and capacities. During redesigning
the network, some plants have been established in the tra-
ditional network or existed in many places. For example,
in the Shaanxi province of China, 21 smelters, 13 plas-
tic pants, and 8 glass plants were established to meet the
recycling demand. Another challenge in the reverse logis-
tics network redesign problem is to determine if these
existing remanufacturing plants should be used in the
redesigned network.
In recent years, reverse logistics networks have been
widely studied in the literature. Most studies investigate
the reverse logistics network design problem (RLND)
that aims to build a new reverse logistics network for
emerging recovery industries (e.g. Ene and Öztürk 2015;
Sadrnia, Langarudi, and Sani 2020; Rentizelas et al. 2021).
Some studies focus on the reverse logistics network
redesign problem (RLNR), which aims to improve the
existing network through various strategies such as the
insertion of new facilities or relocation of current facil-
ities (Bing et al. 2015; Trochu, Chaabane, and Ouhim-
mou 2018; Gao and Cao 2020). RLNR is similar to an
RLND with some existing facilities. When redesigning a
reverse logistics network, these existing facilities should
be considered for use. We relate our work with literature
on RLND and RLNR (RLND/R) to highlight our
contributions.
The RLND/R have some characteristics that differ-
entiate them from the forward logistics network design
problem (Fleischmann et al. 2001; Jayaraman, Patter-
son, and Rolland 2003; Min, Jeung Ko, and Seong Ko
2006). Firstly, multiple products and multiple materials
are simultaneously considered in the reverse flow. Sec-
ondly, products with different quality or components are
generally handled in different manners in the reverse
logistics network. Thirdly, more types of facilities are
required for recycling products and materials, such as
collection centres, inspection centres, disassembly cen-
tres, repair centres, remanufacturing plants, and landfills.
Finally, the uncertain supply of products makes it harder
to decide locations and capacities for facilities in the
RLND/R. Due to these characteristics, researchers sug-
gest that more attention should be paid to the reverse
problems.
Several research aspects have been discussed in
the existing RLND/R literature, such as multi-echelon
reverse logistics networks (e.g. Jayaraman, Patterson, and
Rolland 2003; Min, Jeung Ko, and Seong Ko 2006; Eskan-
darpour et al. 2014; Tosarkani, Amin, and Zolfagharinia
2020), multi-product reverse logistics networks (e.g. Alu-
mur et al. 2012; Bing et al. 2015; Sadrnia, Langarudi,
and Sani 2020), multi-period recycling (e.g. Xu et al.
2017; Reddy, Kumar, and Ballantyne 2019; Shi et al.
2020), multi-objective decision (e.g. Pishvaee, Farahani,
and Dullaert 2010; Tosarkani, Amin, and Zolfagharinia
2020), and the effect of uncertainty (e.g. Lieckens and
Vandaele 2007; Krug, Guillaume, and Battaïa 2021). Table
1 summarises the recent literature on RLND/R. This
paper focuses on the multi-echelon and multi-product
reverse logistics network redesign problem.
Multi-echelon reverse logistics network depicts the
complicated recycling process of end-of-life products.
Various facilities are designed in the network such as col-
lection centres, disassembly centres, and remanufactur-
ing plants. The relevant research focuses on determining
Table 1. Comparison of the recent RLND/R research.
Authors Multi-echelon Multi-product Multi-period Multi-objective Uncertainty Model Facility location
Jayaraman, Patterson,
and Rolland (2003)
Min, Jeung Ko, and
Seong Ko (2006)
Lieckens and Vandaele
(2007)
Pishvaee, Farahani, and
Dullaert (2010)
Alumur et al. (2012)
Eskandarpour et al.
(2014)
Bing et al. (2015)
Xu et al. (2017)
Paydar and Olfati
(2018)
Trochu, Chaabane, and
Ouhimmou (2018)
Reddy, Kumar, and
Ballantyne (2019)
Sadrnia, Langarudi,
and Sani (2020)
Tosarkani, Amin, and
Zolfagharinia (2020)
This study
Facility capacity Approach Experiment
√
MILP Collection centr, Reman- Certain Concentration heuristic Numerical examples
ufacturing
√ plant
MINLP Collection cen- Certain Genetic algorithm Numerical examples
tre, Remanufacturing
√ plant
MINLP Reprocessing centre Multi-level Differential evolution Numerical examples
√ √
MILP Production plant, Recovery/ Multi-level Genetic algorithm Numerical examples
Distribution/Collection/
√ √ √ Disposal centre
MILP Inspection cen- Modular A case study in Germany
tre, Remanufacturing
√ √ plant
MILP Collection centre, Recycling Certain Tabu search Numerical examples
centre, Disposal /Recovery
√ centre
MILP Reprocessing centre Certain A case study between
√ √ √ √ Netherland and China
MILP Sorting centre, Recycling plant Certain A case study between
√ √ Greece and China
MILP Collection cen- Certain Genetic algorithm A case study in
INTERNATIONAL JOURNAL OF PRODUCTION RESEARCH
tre, Remanufacturing Iran andnumerical
√ √ plant examples
MILP Sorting centre Multi-level A case study in Canada
√ √
MILP Inspection centre, Certain Three-phase heuristic Numerical examples
√ √ √ Remanufacturing centre
MILP Collection centre, Charity Certain A case study in Iran
√ √ √ √ centre
MINLP Collection centre, Recovery Certain A two-phase fuzzy Numerical examples
centre, Remanufacturing compromise approach
√ √ plant, Supplier/Retailer
MILP Disassembly centre, Multi-level DEH heuristic A case study in
Remanufacturing plant China andnumerical
examples
3
4 A. CHE ET AL.
facility locations (e.g. Jayaraman, Patterson, and Rol-
land 2003; Tosarkani, Amin, and Zolfagharinia 2020).
Most researchers consider a set of candidate facilities
with certain capacities and propose a mix-integer pro-
gramming model (MIP) to decide their locations. Heuris-
tic approaches are widely used to solve the proposed
model. The meta-heuristic approaches include genetic
algorithm (Min, Jeung Ko, and Seong Ko 2006), sim-
ulated annealing (Pishvaee, Kianfar, and Karimi 2010),
memetic algorithm (Pishvaee, Farahani, and Dullaert
2010), Tabu Search (Eskandarpour et al. 2014), fruit fly
optimisation algorithm (Fu et al. 2021), beetle anten-
nae Search (Khan et al. 2020), and gravitational search
algorithm (Wang et al. 2021). Other heuristic approaches
include the concentration heuristic (Jayaraman, Patter-
son, and Rolland 2003), the two-stage heuristic approach
(Lee and Dong 2008), and the three-phase heuristic
approach (Reddy, Kumar, and Ballantyne 2019).
Multi-echelon single-product RLND/R research
investigates the recycling process for one product or one
type of similar products such as wood, sand, office paper,
and polyethene terephthalate bottles. The relevant studies
include Barros, Dekker, and Scholten (1998), Jayaraman,
Patterson, and Rolland (2003), Min, Jeung Ko, and Seong
Ko (2006), Zhou and Zhou (2015), Paydar and Olfati
(2018), etc. Multi-echelon multi-product RLND/R liter-
ature aims to design a comprehensive reverse logistics
network that recycles different products such as vehi-
cles, household appliances, and solid wastes. The relevant
studies include Bing et al. (2015), Xu et al. (2017), Guo,
Zhang, et al. (2020), etc.
Many researchers have studied the RLND for house-
hold appliances or called Waste Electrical and Electronic
Equipment (WEEE). Shih (2001) designed a network
with collection centres, storage sites, disassembly plants,
and disposition facilities and proposed a multi-echelon
multi-product multi-material mix-integer linear pro-
gramming model (MILP) to decide facility locations and
transportation volumes. Achillas et al. (2010) built a
network with collection centres, storage stations, and
treatment units and proposed a multi-echelon MILP
model to decide facility locations and transportation
volumes. Ayvaz, Bolat, and Aydın (2015) constructed
a network with collection centres, sorting centres, and
recycling centres and formulated a multi-echelon, multi-
product and two-stage stochastic programming model
to decide facility locations and transportation volumes.
Tosarkani, Amin, and Zolfagharinia (2020) considered
collection centres, recovery centres, and remanufactur-
ing plants in their network and proposed a multi-
echelon multi-product multi-material multi-objective
MILP model to decide facility locations and trans-
portation volumes. Sadrnia, Langarudi, and Sani (2020)
considered collection centres, recycling centres, and
repair centres in their network and proposed a multi-
echelon multi-product MILP model with uncertainty
to decide the facility locations and transportation vol-
umes. Although these researches have well studied the
RLND of household appliances, they still have three
shortcomings: (1) few studies clearly describe the dis-
assembly and remanufacturing process; (2) most papers
consider certain capacities rather than multi-level capac-
ities for facilities to decide their locations; and (3) few
efficient approaches are developed to solve the proposed
models.
This study investigates the entire recycling pro-
cess of household appliances in China and redesigns
the reverse logistics network with necessary disassem-
bly centres and three types of remanufacturing plants.
A multi-echelon multi-capacity multi-product multi-
material MILP model is proposed to determine the
locations and capacities for disassembly centres and
remanufacturing plants. To solve the proposed model,
we develop an efficient decomposition-and-expansion
heuristic (DEH) algorithm and use a case study and sev-
eral randomly generated instances to evaluate its perfor-
mance.
Comparing to the existing literature, this paper mainly
makes the following contributions. Firstly, it redesigns
a new reverse logistics network of household appli-
ances that incorporates disassembly centres and various
remanufacturing plants to improve the recycling ratio.
As many remanufacturing plants have been established
in the traditional network, it also discusses if these exist-
ing facilitates should be remained in the redesigned net-
work. Secondly, it considers multi-level capacity choices,
instead of fixed capacities, for facilities and proposes a
MILP to decide their locations and capacities. Finally, it
develops an efficient DEH algorithm to solve the pro-
posed model.
The remainder of this paper is organised as follows.
In Section 2, the detailed problem description and its
mathematical formulation are demonstrated. Section 3
presents the DEH algorithm. Section 4 introduces the
numerical experiment of a real-life instance. Section 5
evaluates the DEH algorithm with randomly generated
instances. Finally, the conclusions and future directions
are discussed in Section 6.
2. Problem description and formulation
Consider a set of cities where multiple household appli-
ances are recycled through the traditional method, as
shown in Figure 1(a). In the traditional network, col-
lection centres collect various products and break them
into valuable metal materials. Smelters reprocess the
 INTERNATIONAL JOURNAL OF PRODUCTION RESEARCH 5

materials and use them for remanufacturing. The net- D Set of candidate disassembly centres
work is less efficient because collection centres cannot L Set of disassembly lines
efficiently disassemble products and remanufacturing R Set of the existing remanufacturing plants
plants for plastic and glass pieces are quite inadequate. R Set of the new candidate remanufacturing plants
To improve the recycling rate, disassembly centres and K Types of remanufacturing plants
various types of remanufacturing plants should be intro- S Set of capacity level choices
duced in the network. We redesign a new network as
For simplicity, Al represents the set of end-of-life
shown in Figure 1(b).
household appliances processed in disassembly line l. Rk
In the new network, collection centres collect products
and Rk indicate the set of k type of existing remanufac-
and send them to disassembly centres. Disassembly cen-
turing plants and new remanufacturing plants, respec-
tres break products into materials and send them to dif-
tively. Mk denotes the set of materials processed in k-type
ferent remanufacturing plants. Remanufacturing plants
remanufacturing plants.
reprocess the materials and use them in remanufacturing.
Parameters
The key problem in redesigning the network is to decide
the best locations and capacities of disassembly centres on,a Output amount of end-of-life household
and remanufacturing plants. However, many remanufac- appliance a in city n
turing plants are established in the traditional network or wa Weight of household appliance a
existed in many places. Another challenge in redesigning cn Collecting cost in city n
the network is to decide if these existing remanufacturing σa Subsidy for recycling household appliance
plants should be used in the new network. a
In this paper, we consider a set of candidate disas- θ a,m Conversion rate from household appliance
sembly centres D = {1, 2, . . . , |D|} in the new network. a to material m
A = {1, 2, . . . , |A|} kinds of household appliances are col- D
vd,l Variable cost of disassembly line l in can-
lected from cities N = {1, 2, . . . , |N|} and sent to these didate disassembly centre d
disassembly centres. Each disassembly centre has several D
cl,s Capacity of disassembly line l in level s
disassembly lines L = {1, 2, . . . , |L|}. Each disassembly D
fd,l,s Fixed cost of candidate disassembly centre
line chooses a capacity level from capacity choices S = {1,
d to set the capacity of disassembly line l in
2, . . . , |S|}. M = {1, 2, . . . , |M|} types of materials are
level s
abstracted from household appliances. These materials R
vr,m Variable cost of the existing remanufactur-
are sent to K = {1, 2, . . . , |K|} types of remanufactur-
ing plant r to process material m
ing plants. A set of remanufacturing plants R = {1, 2, . . . , R
cr,m Capacity of the existing remanufacturing
|R|} have been built in the traditional network. They have
plant r to process material m
fixed capacities to process each material. A set of new
frR Fixed cost of the existing remanufacturing
remanufacturing plants R = {1, 2, . . . , |R |} are intro-
plant r
duced in the new network to prevent the shortage of these
bRr,m Unit benefit of the existing remanufactur-
existing plants. Each new remanufacturing plant chooses
ing plant r to process material m
a capacity level for each material from capacity choices 
vrR ,m Variable cost of the new remanufacturing
S = {1, 2, . . . , |S|}.
plant r to process material m
The objective of the problem is to redesign the exist- R 
cm,s Capacity of a new remanufacturing plant
ing reverse logistics network to maximise the total profit.
to process material m in level s
The key decisions include (1) locations and capacities of 
frR ,m,s Fixed cost of the new remanufacturing
disassembly centres; (2) existing remanufacturing plants
plant r to process material m in level s
that should be opened in the new network; (3) loca- 
bRr ,m Unit benefit of the new remanufacturing
tions and capacities of new remanufacturing plants; and
plant r to process material m
(4) optimal transportation quantity from one facility to D
tn,d Transportation cost from city n to candi-
another.
date disassembly centre d
To formulate the problem, the following notations are R , tR 
td,r d,r Transportation cost from disassembly cen-
defined.
tre d to the existing remanufacturing
Sets
plants r and the new remanufacturing
N Set of cities plants r
A Set of end-of-life household appliances Dmax , Rkmax Maximum numbers of disassembly centres
M Set of materials and k type of remanufacturing plants
6 A. CHE ET AL.


Decision variables  
R R
+ td,r  qd,r  ,m (1)
qD quantity of household appliance a from city n to d∈D r ∈R m∈M
n,d,a
disassembly centre d Subject to
qRd,r,m quantity of material m from disassembly centre 
d to the existing remanufacturing plant r qDn,d,a = on,a ∀n ∈ N, ∀a ∈ A (2)

qRd,r ,m quantity of material m from disassembly centre d∈D
d to the new remanufacturing plant r   
qRd,r,m + qRd,r ,m
xdD equal to 1 if the candidate disassembly centre d r∈R r ∈R
is open, and 0 otherwise 
xrR equal to 1 if the existing remanufacturing plant = qD
n,d,a wa θa,m ∀d ∈ D, ∀m ∈ M (3)
r is open, and 0 otherwise n∈N a∈A
  
xrR equal to 1 if the new remanufacturing plant r is qD D D
n,d,a ≤ cl,s yd,l,s ∀d ∈ D, ∀l ∈ L (4)
open, and 0 otherwise n∈N a∈Al s∈S
D
yd,l,s equal to 1 if the candidate disassembly centre d 
sets its capacity of disassembly line l in level s, qRd,r,m ≤ cr,m
R
xrR ∀r ∈ Rk , ∀m ∈ Mk , ∀k ∈ K
and 0 otherwise d∈D
 (5)
yrR ,m,s equal to 1 if the new remanufacturing r sets its
    
capacity to process material m in level s, and 0 qRd,r ,m ≤ R R
cm,s yr ,m,s
otherwise d∈D s∈S

The RLNR can be formulated as the following model ∀r ∈ Rk ,


∀m ∈ Mk , ∀k ∈ K (6)
(RM). qRd,r,m = 0 ∀d ∈ D, ∀r ∈ Rk ,
 ∀m ∈ M − Mk , ∀k ∈ K (7)
  
Max f = σa q D + bRr,m qRd,r,m R
n,d,a qd,r ,m = 0 ∀d ∈ D, ∀r ∈ Rk ,
n∈N d∈D a∈A d∈D r∈R m∈M
 ∀m ∈ M − Mk , ∀k ∈ K (8)
    
+ bRr ,m qRd,r ,m D
yd,l,s = xdD ∀d ∈ D, ∀l ∈ L (9)
d∈D r∈R m∈M s∈S
 
  
yrR ,m,s = xrR

∀r ∈ Rk , ∀m ∈ Mk , ∀k ∈ K
D D
− fd,l,s yd,l,s + frR xrR
s∈S
d∈D l∈L s∈S r∈R
 (10)
  R
+
 
frR ,m,s yrR ,m,s yr ,m,s =0 ∀r ∈ Rk , ∀m ∈ M − Mk ,
r ∈R m∈M s∈S
∀s ∈ S, ∀k ∈ K (11)
⎛

  xdD ≤ Dmax (12)
−⎝ D D
vd,l qn,d,a
d∈D
n∈N d∈D l∈L a∈Al   
  xrR + xrR ≤ Rkmax ∀k ∈ K (13)
R
+ vr,m qRd,r,m
r∈Rk r ∈R k
d∈D r∈R m∈M
 qD qRd,r,m ,

qRd,r ,m ≥ 0
   
n,d,a , (14)
+ vrR ,m qRd,r ,m R
xdD , xrR , x ∈ {0, 1}
r (15)
d∈D r ∈R m∈M
 D 
 yd,l,s , yrR ,m,s ∈ {0, 1} (16)
− cn wa qD
n,d,a
n∈N d∈D a∈A The objective function (1) maximises the profit of the
 new reverse logistics network including the revenue from
D
+ tn,d wa qD
n,d,a the subsidy and materials, the fixed and variable costs for
n∈N d∈D a∈A setting up facilities and processing products and materi-
 
R R
+ td,r qd,r,m als, and the collection and transportation costs for deliv-
d∈D r∈R m∈M ering products or materials from one facility to another.

Figure 2. The general framework of DEH.
Constraints (2)–(3) ensure the flow balance of disas-
sembly centres and remanufacturing plants, respectively.
Constraints (4)–(6) represent the capacity limits of the
candidate disassembly centres, existing remanufacturing
plants, and new remanufacturing plants. Constraints
(7)–(8) indicate that the existing and new remanufac-
turing plants cannot accept the materials beyond their
recycling scope. Constraints (9)–(10) define the relation-
ship between facility-location and capacity-level deci-
sions. When a disassembly centre (new remanufactur-
ing plant) is open, one capacity level is selected for
each disassembly line (material). Constraint (11) suggests
that new remanufacturing plants do not choose capac-
ity levels for the materials beyond their recycling scope.
Constraints (12) and (13) limit the numbers of disas-
sembly centres and remanufacturing plants, respectively.
Constraints (14)–(16) restrict the regions of decision
variables.
3. Decomposition-and-expansion heuristic
In this section, we introduce an efficient DEH algorithm
to solve the proposed problem. This problem aims to
determine the locations and capacities for disassembly
centres and remanufacturing plants. It can be decom-
posed into two single-decision problems: facility location
and capacity determination problems. In the first prob-
lem, locations for facilities are decided by relaxing their
capacity-level choices. In the second problem, capacity
levels for facilities are determined by fixing their loca-
tions determined in the first problem. A high-quality
initial solution can be quickly obtained through this pro-
cess. To further improve the initial solution, an expansion
heuristic is developed based on Jayaraman, Patterson,
and Rolland (2003). This heuristic improves the initial
INTERNATIONAL JOURNAL OF PRODUCTION RESEARCH 7
solution by fixing the locations for disassembly centres
and gradually expanding the remanufacturing facilities.
Thus, the DEH algorithm consists of two components: a
decomposition heuristic and an expansion heuristic. Its
general framework is shown in Figure 2.
3.1. Decomposition heuristic
The decomposition heuristic first determines the
locations for facilities and then determines their capac-
ity levels. It aims to quickly find an initial solution for
the proposed problem. In the RM model, every candi-
date facility is associated with several binary variables to
determine their optimal capacity levels. With the increas-
ing candidate facilities, more capacity-level variables are
involved in the model, which can lead to difficulty in find-
ing the optimal solution. To better solve the problem, we
first decide the locations for facilities by solving a reduced
MILP model that relaxes the large number of binary vari-
ables on capacity level choices, called RM1 model. Then,
we determine the optimal capacity levels for facilities by
solving another MILP model that fixes the facility loca-
tions to the values determined in RM1 model, called RM2
model.
The RM1model is described as
Max f
subject to:
(2)–(15) and

0 ≤ yd,l,s
D
≤ 1, 0 ≤ yrR ,m,s ≤ 1 (17)
The objective function and constraints (2)–(15) are the
same as those in the RM model. Constraint (17) relaxes
the binary variables of capacity level choices to real vari-
ables between 0 and 1.
8 A. CHE ET AL.
The original RM model is NP-hard because the classi-
cal reverse logistics network design problem is NP-hard
(Pishvaee, Farahani, and Dullaert 2010; Santibanez-
Gonzalez and Diabat 2013). In this Section, the RM1
model relaxes numerous binary variables of the original
RM model for deciding facility capacities, which signif-
icantly reduces the computational complexity. Although
the RM1 model is still NP-hard, it can be relatively effi-
ciently solved by a standard mathematical programming
solver. We solve the RM1 model with CPLEX and remem-
ber the locations for disassembly centres, existing reman-
ufacturing plants and new remanufacturing plants as x̂dD ,

x̂rR , and x̂rR . Then, we determine their capacities using the
following model (RM2).
Max f
subject to:
(2)–(11), (14)–(16), and
xdD = x̂dD ∀d ∈ D (18)
xrR = x̂rR ∀r ∈ R (19)
 
xrR = x̂rR ∀r ∈ R (20)
The objective function and constraints (2)–(11) and
(14)–(16) are the same as those in the RM model. Con-
straints (18)–(20) fix the locations for disassembly cen-
tres, existing remanufacturing plants and new remanu-

facturing plants to the x̂dD , x̂rR , and x̂rR obtained by the
RM1 model.
The RM2 model can be also efficiently solved by a
standard solver because most variables are fixed to cer-
tain values. The facility-location variables are fixed to
the results of RM1 model. The capacity variables and
the transportation-quantity variables for non-open facil-
ities determined by RM1 model are restricted to zero
under the constraints (9)–(10) and (5)–(6). Actually, the
RM2 model only needs to determine the capacity vari-
ables and the transportation-quantity variables for open
facilities determined by RM1 model. We solve the RM2
model with CPLEX and remember its solution and profit
as X∗ and f ∗ , respectively. They are also the initial solution
and profit of the original RM model.
3.2. Expansion heuristic
The expansion heuristic focuses on improving the ini-
tial solution obtained by the decomposition heuristic.
This solution can be further improved when the opti-
mal locations for disassembly centres or remanufacturing
plants are not found by the RM1 model. We observe the
RM1 model is most efficient for determining the optimal
locations for disassembly centres, but not for reman-
ufacturing plants because of the complicated correla-
tion between existing remanufacturing plants and new
remanufacturing plants. Therefore, we fix the locations
for disassembly centres and iteratively expand the reman-
ufacturing plants to improve the initial solution.
Jayaraman, Patterson, and Rolland (2003) introduced
the expansion heuristic in solving the RLND. They use
the concentration heuristic proposed by Rosing and ReV-
elle (1997) to obtain an initial facility-location solution
and adopt the expansion heuristic to improve the ini-
tial solution. The basic logic of the expansion heuristic
is checking each non-open facility in the initial solu-
tion to identify if they can improve the initial decision.
In this paper, we consider several types of remanufac-
turing plants in our network. Each type of remanu-
facturing plants has a large number of candidate loca-
tions. It is time-consuming to check each non-open
plant one by one. To improve the efficiency, we rank
all non-open plants and check a group of non-open
plants together in each iteration. Therefore, there are
two differences between the algorithms of this paper
and Jayaraman, Patterson, and Rolland (2003). First, we
use the decomposition heuristic, instead of the con-
centration heuristic, to obtain an initial solution. Sec-
ond, we rank all non-open facilities and iteratively check
a group of non-open facilities, instead of each non-
open facility, in expansion heuristic. The detailed pro-
cedures of our expansion heuristic are described as
follows.
First, we place all open remanufacturing plants deter-
mined by the initial solution X∗ into the checking set
CS = {OR1 , OR2 , . . . , OR|K| }, which distinguishes the
different types of remanufacturing plants by k, k∈K. Sec-
ond, we rank all non-open remanufacturing plants in
non-decreasing order of their distance to the closest open
disassembly centres in the initial solution, and we save
them into the ranking set RS = {NR1 , NR2 , . . . , NR|K| }.
If a tie occurs, we rank the non-open remanufacturing
facilities according to their transportation cost to the sec-
ond closest open disassembly centres. Third, for each
type of remanufacturing plant, we move the first Num
plants from the ranking set RS into the expanding set
ES = {ER1 , ER2 , . . . , ER|K| }. Finally, we solve the follow-
ing RM3 model, which fixes the locations of disassembly
centres and shuts down the remanufacturing plants that
are not in the checking or expanding sets. If a better solu-
tion is obtained, we update the solution X∗ and the profit
value f ∗ and reset the checking set CS; otherwise, we
repeat the third step and move the next group of non-
open remanufacturing plants into the expanding set. This
process is continued until all non-open remanufactur-
ing plants have been checked, or the maximum iteration
MaxIter is met. The RM3 model is described as
Max f
subject to:

(2)–(16) and
xdD = [xdD ]∗ ∀d ∈ D (21)
xrR = 0 ∀r ∈
/ CS ∪ ES (22)
R
x r =0 ∀r ∈
/ CS ∪ ES (23)
Constraint (21) fixes the locations for disassembly
centres to the values [xdD ]∗ determined in the initial solu-
tion X∗ . Constraints (22)–(23) shut down the reman-
ufacturing plants that are not in the checking sets or
expanding sets.
The RM3 model fixes locations of disassembly cen-
tres and restricts feasible locations of remanufacturing
plants within the checking and expanding sets. It can
be efficiently solved using a standard solver. Compar-
ing to the RM2 model, the RM3 expands the location
space of remanufacturing plants. A better solution can be
obtained to improve the incumbent solution X∗ .
During the expansion iteration, two problems may
occur because the subsets NR1 , NR2 , . . . , NR|K| in the
ranking set RS have different sizes. First, small subsets
finish the expansion iteration before large subsets. Sec-
ond, some subsets can have non-open facilities less than
parameter Num during the iteration. For the first prob-
lem, we continue running the iteration by expanding only
the remanufacturing plants left in the large subsets. For
the second problem, we move all remaining non-open
facilities into the expanding sets and keep checking if
these facilities can improve the incumbent solution.
In addition, there are two user-defined parameters:
Num and MaxIter in the expansion procedure. Num
defines the expanding size of non-open remanufactur-
ing plants. MaxIter indicates the maximum iteration.
Their value can affect the performance of the DEH
algorithm. A larger Num value indicates more non-open
remanufacturing plants are placed into the expanding
set, which causes the RM3 model has a larger solution
space. A larger MaxIter value indicates more expanding
sets are allowed to be checked. The expansion procedure
becomes time-consuming but quite probable to find a
better solution when Num and MaxIter have large values.
To balance the computational time and solution quality,
we set Num based on the maximum numbers of reman-
ufacturing plants Rk max defined in the RM model, and
we set parameter MaxIter based on the total non-open
facilities and the value of Num.
3.3. Procedure of DEH algorithm
The decomposition-and-expansion heuristic can be
summarised in Algorithm DEH, where step 1 initialises
INTERNATIONAL JOURNAL OF PRODUCTION RESEARCH 9
the parameters and sets, steps 2–3 illustrate the decompo-
sition heuristic, and steps 4–7 correspond to the expan-
sion heuristic. Iter is used to count the iterations in the
expansion heuristic. X and f store the solution and its
profit value of the RM3 model in each iteration, respec-
tively.
4. Case study
We evaluate the redesigned network using a real case in
Shaanxi province, China. The data is collected from pub-
lic reports and interviews with local organisations. We
solve the proposed model by CPLEX and using our DEH
algorithm; the algorithm is coded in C++ on a PC with
an Intel core i5 CPU (3.1 GHZ) and 8 GB RAM. Sensi-
tivity analysis is conducted to determine how changes in
the parameters can affect decisions.
4.1. Case description
Every year, over 500,000 tons of end-of-life household
appliances are recycled in Shaanxi province, China. Most
products are recovered in the traditional way, which leads
to serious resource waste and environmental pollution.
To improve the recycling performance, we redesign the
reverse logistics network based on the proposed model.
The province map is shown in Figure 3. Ten cities are
located in different regions. Five end-of-life household
appliances are considered to recycle as shown in Figure
4. The recycled materials include three metal materi-
als, three plastic materials, and one glass material. There
have been 21 metal smelters, 13 plastic plants, and 8
glass plants in the province, as shown in Figure 3. To
redesign the network, we assume every city has a candi-
date disassembly centre, smelter, plastic plant, and glass
plant.
To determine the optimal capacities for candidate dis-
assembly centres and remanufacturing plants, we design
small, medium, and large capacity levels as shown in
Tables 2 and 3. The capacity for each level is obtained
based on the current technology and management pol-
icy. The other parameters for this case, such as subsi-
dies, benefits, and transportation costs, are available at
https://www.mediafire.com/file/p18fsc0vwwofpq0/
2021_Data.zip/file.
4.2. Computational results
We solve the proposed model using CPLEX and the
DEH algorithm. As this section mainly evaluates the
redesigned network, we fix the key parameters Num and
MaxIter of the DEH algorithm to 5 and 10. In addition,
the maximum numbers of facilities {Dmax , R1max , R2max ,
10 A. CHE ET AL.

Algorithm DEH

1. Initialise x̂dD , x̂rR , x̂rR , f ∗ , f, Iter = 0
X∗ ← Ø, X← Ø, CS← Ø, RS← Ø, ES← Ø

2. Solve RM1 model, and output the values x̂dD , x̂rR , and x̂rR
3. Solve RM2 model, and save the solution and its profit value as X∗ and f ∗
4. Add all open remanufacturing plants in solution X∗ into the checking set CS = {OR1 , OR2 , ... , OR|K| }
5. Rank all non-open remanufacturing plants in the non-decreasing order of their transportation cost to the closest open disassembly centres; save them into
the ranking set RS = {NR1 , NR2 , ... , NR|K| }
6. While Iter < MaxIter and RS is not null
6.1 Move the first Num plants for each type of remanufacturing plants in the ranking set RS to the expanding set ES = {ER1 , ER2 , ... , ER|K| }
6.2 Solve RM3 model to obtain the new solution X and its profit value f
iff > f ∗ , then
update the solution X ∗ and profit value f ∗ with the new solution X and profit f
update the checking set CS
End if
6.3 Set Iter ← Iter + 1
7. Output the final solution X ∗ and its profit value f ∗

Figure 3. City map and the existing remanufacturing facilities of Shaanxi province.

Figure 4. End-of-life household appliances and recycled materials.

 INTERNATIONAL JOURNAL OF PRODUCTION RESEARCH 11

Table 2. Capacity levels for candidate disassembly centres. TimeD represent the objective value and computational
Candidate Capacity level time of the DEH algorithm, respectively; GapC calcu-
facilities Disassembly lines Small Medium Large lates the objective gap using the formula GapC = (ObjC
Disassembly TV/Computer 500,000 1,000,000 2,000,000 − ObjD )/ObjC × 100%. Table 4 shows the proposed
centres Refrigerator/Air conditioner 500,000 1,000,000 2,000,000 model has feasilbe soluitons only when {Dmax , R1max ,
Washing machine 200,000 500,000 1,000,000
R2max , R3max } ≥ {3, 3, 2, 1}, which means at least 3 dis-
Table 3. Capacity levels for candidate remanufacturing plants. assembly centres, 3 smelters, 2 plastic plants, and one
glass plant are required in this province. The objective
Candidate Capacity level (ton)
value decreases with the maximum numbers, which indi-
remanufacturing plants Materials Small Medium Large cates strong control over the facility numbers harms the
Smelters Iron 10,000 50,000 100,000 profit of the entire network. Meanwhile, all objective
Copper 10,000 50,000 100,000
Aluminium 5000 10,000 50,000 gaps are lower than 0.1% and the computational time of
Plastic plants PP plastic 5000 10,000 50,000 the DEH algorithm is shorter than 5 s, which suggests a
PS plastic 5000 10,000 50,000
ABS plastic 1000 5000 10,000 high-quality solution can be efficiently obtained by the
Glass plants Glass 5000 10,000 50,000 proposed heuristic.
For {Dmax , R1max , R2max , R3max } = {5, 5, 5, 5}, the optimal
R3max } in the model are generally given by the local gov- locations and capacities for facilities are shown in Figure
ernment. We first set {Dmax , R1max , R2max , R3max } = {7, 7, 7, 5 and Table 5. Figure 5 shows that five disassembly cen-
7} and gradually decrease them to their minimum values. tres d ∈{4, 5, 6, 7, 8} should be built to process end-of-life
The computational results are shown in Table 4, where household appliances; three candidate smelters r ∈{5, 7,
ObjC and TimeC indicate the optimal objective value and 8} and two existing smelters r∈{19, 20} should be opened
computational time of CPLEX, respectively; ObjD and to reprocess the obtained metal materials; three candidate

Table 4. Computational results for the case study.

DEH
Maximum numbers CPLEX (Num = 5, MaxIter = 10)
NO. Dmax R1max R2max R3max ObjC (RMB) TimeC (s) ObjD (RMB) TimeD (s) GapC (%)
1 7 7 7 7 1236505064 8.11 1236505064 4.10 0.00%
2 6 6 6 6 1231884683 10.24 1231673709 4.29 0.02%
3 5 5 5 5 1227013060 8.67 1227013060 4.87 0.00%
4 4 4 4 4 1221023740 9.48 1221023740 4.20 0.00%
5 3 3 3 3 1204656302 3.85 1204656302 3.10 0.00%
6 3 3 2 1 1166899533 2.40 1166899533 2.70 0.00%

Figure 5. Optimal facility locations when {Dmax , R1max , R2max , R3max } = {5, 5, 5, 5}.
12 A. CHE ET AL.

Table 5. Optimal capacity levels for candidate facilities to open.

Capacity level choices
Candidate facilities TV/Computer Refrigerator/Air conditioner Washing machine
Disassembly d = 4 Large Medium Medium
centre d = 5 Large Large Large
d = 6 Small Small Small
d = 7 Medium Large Medium
d = 8 Medium Medium Small
Smelters Iron Copper Aluminium
r = 5 Large Medium Medium
r = 7 Medium Small Small
r = 8 Medium Small Small
Plastic plants PP plastic PB plastic ABS plastic
r = 6 Small Small Small
r = 7 Medium Medium Medium
r = 8 Medium Small Small
Glass plants Glass
r = 4 Large
r = 5 Large
r = 6 Small
r = 8 Medium

plastic plants r ∈{6, 7, 8} and two existing plastic plants
r∈{2, 11} should be open to reprocess the obtained plas-
tic materials; and four candidate glass plants r ∈{4, 5,
6, 8} and one existing glass plant r = 5 should be open
to reprocess the obtained glass materials. Table 5 shows
these candidate facilities make different capacity choices
based on their recycling demands.
In addition, the result on recycling quantity indicates
over 260, 000 tons of metals, 100, 000 tons of plastics,
and 60,000 tons of glass can be extracted from household
appliances. Almost all useful components are disassem-
bled, sorted, and recycled in the new network. However,
in the traditional network, according to our interview
with the local collection centres, only metal materials are
efficiently recycled for their high benefits. The remaining
materials usually face poor treatments such as landfill-
ing, burning, and long-term storage. The recycling rate in
the new network is about 91.5%, while in the traditional
network it is only about 55.6%. They are calculated using
the formulas μnew = Wu /Wp (%) and μtra = Wm /Wp (%),
where μnew , Wu , Wp , μtra , and Wm denote the recycling
rate in the new network, the weight of useful materials
(metals, plastics, and glasses) in the collected products,
the weight of the collected products, the recycling rate in
the traditional network, and the weight of metals, respec-
tively. Therefore, the new network not only improves the
recycling rate of household appliances but also reduces
their negative effects on the environment.
4.3. Sensitivity analysis of model parameters
The RLNR decision can be largely affected by changes
in parameters such as subsidy, fixed cost, transporta-
tion cost, and benefit of materials. To investigate the
effect, we conduct a sensitivity analysis for the model
parameters using Taguchi’s experimental design method
(Taguchi, Jugulum, and Taguchi 2004). This method
adopts orthogonal arrays and signal-to-noise (SN) ratios
to find the best combination of parameters. In the pro-
posed RM model, there are five key types of parame-
ters: subsidy σ a , product amount on,a , transportation cost
D , t R , t R }, fixed cost {f R f R , f R }, and benefit of
{tn,d
d,r d,r r , r ,m,s r

materials {bRr ,m , bRr,m }. We assume each type of param-
eter has four levels. Each level equals the value of the
parameter in the case study multiplied by a factor ,
where ε ∈{0.5, 1.0, 1.5, 2.0}. For example,  = 0.5 means
the parameter equals half of its value in the case study;
 = 1.0 indicates keeping the value constant;  = 2.0
implies rising the value to its double. An orthogonal array
L16 (45 ) that includes 16 experiments can be used in our
experiment. The SN ratio of experiments is calculated
by the formula ηi = −10log f12 , where fi is the optimal
i
objective value of the RM model in experiment i. The
orthogonal array and experimental results are shown in
Table 6.
Table 7 summarises the computational results in
aspects of the average SN ratio of parameters in four
levels, the range between the maximum and minimum
average SN ratio , the sum of squares S, and the signif-
icance rank of parameters. From Table 7, we can observe
that the product amount plays the most role in the RLNR
decision because it determines the recycling amount of
valuable materials. The benefit of materials and subsidy
play the second and third roles because they directly
affect the profit of the new network. The transportation
cost and fixed cost play the fourth and fifth roles.
Five important managerial implications can be sum-
marised from the case study. Firstly, the recycling ratio
of household appliances can be improved from 55.6%
to 91.5% by redesigning the traditional reverse logistics
 INTERNATIONAL JOURNAL OF PRODUCTION RESEARCH 13

Table 6. Orthogonal array and experimental results.

 in subsidy  in product  in fixed cost  in benefit of materials  in transportation cost
  D , t R , t R }
No. {σ a } amount {on,a } {frR , frR ,m,s , frR } {bRr ,m , bRr,m } {tn,d d,r d,r ηi
1 0.5 0.5 0.5 0.5 0.5 164
2 0.5 1.0 1.0 1.0 1.0 178
3 0.5 1.5 1.5 1.5 1.5 186
4 0.5 2.0 2.0 2.0 2.0 191
5 1.0 0.5 1.0 1.5 2.0 179
6 1.0 1.0 0.5 2.0 1.5 187
7 1.0 1.5 2.0 0.5 1.0 180
8 1.0 2.0 1.5 1.0 0.5 188
9 1.5 0.5 1.5 2.0 1.0 183
10 1.5 1.0 2.0 1.5 0.5 187
11 1.5 1.5 0.5 1.0 2.0 188
12 1.5 2.0 1.0 0.5 1.5 187
13 2.0 0.5 2.0 1.0 1.5 180
14 2.0 1.0 1.5 0.5 2.0 183
15 2.0 1.5 1.0 2.0 0.5 193
16 2.0 2.0 0.5 1.5 1.0 194

Table 7. Analysis and rank of model parameters.

Average ηi in four levels

Parameters 1 2 3 4  S Rank
Subsidy {σ a } 180 183 186 188 8 137 3
Product amount {on,a } 176 184 187 190 14 416 1

Fixed cost {frR , frR ,m,s , frR } 183 184 185 184 2 6 5

Benefit of materials {bRr ,m , bRr,m } 178 183 186 189 11 236 2
Transportation cost {tn,d , td,r D R , t R } 183 184 185 185 2 14 4
d,r

network. Second, the minimum facilities for redesign-
ing the network can be obtained by solving the proposed
model. For example, at least 3 disassembly centres,
3 smelters, 2 plastic plants, and one glass plant are
required in the province to efficiently recycle the house-
hold appliances of 10 cities. Thirdly, strict limitation
on facility numbers harms the recycling profit and
willingness. Policymakers should balance the recycling
profit and recycling ratio to make the limitation deci-
sion. Fourthly, disassembly centres and remanufactur-
ing plants make different location and capacity decisions
based on their recycling demands. Finally, parameters of
product amount, material benefit, and government sub-
sidy play the first, second, and third roles in affecting the
recycling profit and decision.
5. Randomly generated instances
In this section, a set of large-scale instances are ran-
domly generated to further evaluate the performance of
the DEH algorithm. As the performance can be affected
by changes in user-defined parameters, we also make a
sensitivity analysis of these parameters using the gener-
ated instances. The best combination of parameters is
given based on the experimental results.
reverse logistics network. The city number N is set to 20,
30, and 40. The existing remanufacturing plants Rk are
given a small, medium, and large number according to
the city number. The maximum numbers {Dmax , R1max ,
R2max , R3max } increase by 3 as the city number increases by
10. For a certain set of existing facilities and maximum
numbers, we randomly generate 10 instances and calcu-
late their average computational results. All experiments
are run for 2 h until the optimal solution is obtained. If the
optimal solution is not found within 2 h, the incumbent
solution is output.
In these randomly generated instances, parameters
wa , σ a , and θ a,m have the same values as those in
the case study. Other parameters are generated in the
regions shown in Table 8. Two assumptions are consid-
ered when generating random instances. First, if capac-
ity level s > sêđŇ, then fd,l,s
D > fD R R
d,l,s and fr ,m,s > fr ,m,s ,
which means higher-level capacity requires higher fixed
cost. Second, if city index n > n , then the fixed cost
and variable cost in city n are generally higher than
those in city n . The generated instances are available at
https://www.mediafire.com/file/p18fsc0vwwofpq0/
2021_Data.zip/file.

5.1. Data generation 5.2. Computational results

We randomly generate a set of large-scale instances with The computational results for the randomly generated
different numbers of cities and existing facilities in the instances are presented in Table 9, where two types of
14 A. CHE ET AL.

Table 8. Random regions for parameters.

Items Random regions
Candidate disassembly centres D ∈ [200000, 1600000], v D ∈ [2.0, 5.0]
fd,l,s d,l
  
Candidate smelters frR ,m,s ∈ [200000, 2000000], bRr ,m ∈ [2000, 5000], vrR ,m ∈
[500, 1000]
  
Candidate plastic plants frR ,m,s ∈ [200000, 1000000], bRr ,m ∈ [1000, 2500], vrR ,m ∈
[500, 800]
  
Candidate glass plants frR ,m,s ∈ [200000, 500000], bRr ,m ∈ [1000, 1500], vrR ,m ∈
[500, 700]
Existing smelters R ∈ [5000, 50000], f R ∈ [100000, 650000], bR ∈ [2000,
cr,m r r,m
R ∈ [500,1000]
5000], vr,m
Existing glass plants R ∈ [5000, 50000], f R ∈ [100000, 500000], bR ∈[1000,
cr,m r r,m
R ∈ [500, 800]
2500], vr,m
Existing glass plants R ∈ [5000, 50000], f R ∈ [100000, 300000], bR ∈[1000,
cr,m r r,m
R ∈ [500, 700]
1500], vr,m
Others on,a ∈ [50000, 300000], cn ∈ [1000, 2000], tn,d D , t R , t R ∈
d,r d,r
[100, 100∗N], where the region of transportation costs
increases with the city number N

Table 9. Computational results for the generated instances.

Existing facilities Maximum numbers CPLEX DEH
City |R1 | |R2 | |R3 | Dmax R1max R2max R3max ObjC TimeC (s) ObjD TimeD (s) GapC (%) GapU (%)
20 5 3 2 6 6 6 6 417211074 58.16 417208621 8.78 0.001 0.001
15 10 8 6 6 6 6 418622749 50.59 418584561 9.29 0.011 0.011
25 20 18 6 6 6 6 409909846 107.19 409909846 14.12 0.000 0.000
30 5 3 2 9 9 9 9 481256646 567.92 481150708 22.80 0.021 0.021
20 15 10 9 9 9 9 417512124 4241.32 417327921 108.91 0.043 0.043
35 30 28 9 9 9 9 487697117 3108.49 487683869 95.56 0.003 0.003
40 5 3 2 12 12 12 12 363518139 6683.31 363674990 78.32 – 0.842
25 20 15 12 12 12 12 365505227 7200.00 365491938 247.72 – 2.778
45 40 38 12 12 12 12 390001330 7200.00 389808888 378.76 – 3.666
Note: - means GapC cannot be calculated because the optimal solutions of instances are not obtained within 2 h.

gaps – GapC and GapU – are computed to evaluate the
performance of the DEH algorithm. GapC denotes the
gap from the optimal profit obtained by CPLEX, which is
calculated by the formula in the case study. GapU denotes
the gap from the upper bound provided by CPLEX when
the optimal profit cannot be found within 2 h, as calcu-
lated by formula GapU = (ObjU − ObjD )/ObjU × 100%,
where ObjU denotes the upper bound output by CPLEX
to solve RM model, and ObjD denotes the objective value
output by algorithm DEH.
Table 9 shows that instances for city number |N| = 20
can be solved to optimality by CPLEX within 150 s. When
|N| increases to 30, CPLEX runs over 500 s to obtain
the optimal solution. When |N| increases to 40, most
instances cannot be solved by CPLEX within 2 h. How-
ever, the DEH algorithm runs all instances within 400 s
and provides high-quality solutions with GapC under
0.1% and GapU under 4.0%. These results demonstrate
that the DEH algorithm is efficient in solving large-scale
instances.
5.3. Sensitivity analysis of algorithm parameters
The performance of an algorithm is affected by its
configuration of user-defined parameters (Gao et al.
2019). There are two user-defined parameters in the
DEH algorithm: the expanding size Num and the
maximum iteration MaxIter. We conduct a sensitiv-
ity analysis of these parameters using the generated
instances. The best configuration of parameters is
given based on the experimental results. Each param-
eter is assumed with four levels, Num ∈ {1, 5, 10, 20}
and MaxIter ∈ {10, 30, 50, 100}. Sixteen combinations
of parameters are formed by these levels. There are
three datasets in the randomly generated instances cor-
responding to different city numbers N ∈ {20, 30, 40}.
We evaluate the sixteen combinations of parameters
with each dataset. A total of 1440 experiments are
conducted in this Section. The signal-and-noise ratios
of computational accuracy η1, and computational time
η2, are calculated for each dataset and parameter
1 30
combination, where η1, = −10 log 30 ,
i=1 Gapi ; η2 =
2

1
−10 log 30 30 2
i=1 Timei ; Gapi is the gap between the solu-
tion of DEH algorithm and the best solution/bound of
CPLEX in instance i; Timei is the computational time
of DEH algorithm in instance i. The average SN ratios of
parameters in four levels are shown in Figure 6.
Figure 6 shows the computational accuracy is less
affected by changes in user-defined parameters, which
demonstrates the robustness of the DEH algorithm.

Figure 6. Average SN ratios η1, (a) and η2, (b) of parameters in four levels.
However, the computational time varies with differ-
ent configurations of parameters. According to the
experimental results, the best configurations of {Num,
MaxIter} should be {10, 30}, {20, 10}, and {20,10} for
three datasets with city numbers 20, 30, and 40, respec-
tively.
6. Conclusion
This paper considers a reverse logistics network redesign
problem for end-of-life household appliances. We inves-
tigate the existing recycling process in China and
redesign a new reverse logistics network to improve the
recycling rate. A MILP model is proposed to determine
the optimal locations and capacities for facilities in the
redesigned network. An efficient DEH algorithm is devel-
oped to solve the model. We evaluate the redesigned
network using a real case in Shaanxi province, China. The
results indicate that the recycling rate is largely improved
by the new network in which 91.5% of household appli-
ances could be recycled, while in the traditional network,
only 55.6% of the components are efficiently recycled.
A sensitivity analysis of model parameters is conducted
for the case study using the Taguchi method. The results
show that parameters of product amount, material ben-
efit, and government subsidy play the first, second, and
third roles in affecting the recycling profit and decision.
To further evaluate the efficiency of the DEH
algorithm, a set of large-scale instances are randomly
generated by increasing the city number and varying
the existing facilities. The computational results show
that the DEH algorithm solves all the instances within
INTERNATIONAL JOURNAL OF PRODUCTION RESEARCH 15
400 s and obtains high-quality solutions with gaps from
the optimal objective value of less than 0.1% and gaps
from the upper bound less than 4.0%. This demonstrates
that the DEH algorithm can efficiently yield high-quality
solutions for large-scale instances. A sensitivity analy-
sis of parameters in the DEH algorithm is conducted
with the generated instances. The best configuration of
algorithm parameters is given based on the experimental
results.
In our future work, multiple objectives will be con-
sidered in the model to redesign the reverse logistics
network. Meanwhile, multi-period recycling and vehi-
cle scheduling problems will be combined in the reverse
logistics network redesign problem. Further, uncertain
problems in the model including the uncertain supply
of end-of-life products and the uncertain demand of
materials in the market will be addressed.
Acknowledgements
We are grateful for the valuable comments of the reviewers and
editor.
Disclosure statement
No potential conflict of interest was reported by the author(s).
Funding
This work was supported by National Natural Science
Foundation of China [grant numbers 71871183, 71931007,
71871142].
16 A. CHE ET AL.
Notes on contributors
Ada Che is currently a Full Professor in
the Department of Management Science
and Engineering at Northwestern Poly-
technical University, China. He received
the Ph.D. degree of Mechanical Engi-
neering from Xi’an Jiaotong University in
1999. He has authored or coauthored over
50 articles in international journals, such
as Omega-The International Journal of Management Science,
Naval Research Logistics, IEEE Transactions, European Jour-
nal of Operational Research, International Journal of Production
Research, International Journal of Production Economics, and
Computers and Operations Research. He is currently serving
as an associate editor of the IEEE Transactions on Intelligent
Transportation Systems and Journal of Industrial and Manage-
ment Optimization. His research interests include transporta-
tion planning and optimisation, production scheduling, and
operations research.
Jieyu Lei is currently a Ph.D. student in the
Department of Management Science and
Engineering at Northwestern Polytechni-
cal University, China. She received the
M.S. degree of Management Science and
Engineering from Xidian University in
2016. As a visiting researcher, she worked
with the OPAC group (Operations, Plan-
ning, Accounting, and Control) of the Department of Industrial
Engineering and Innovation Sciences at Eindhoven University
of Technology (TU/e) in 2019. Her research interests include
supply chain management, reverse logistics network design,
and transportation planning and optimisation.
Zhibin Jiang is currently a Full Profes-
sor in the Department of Management
Science at Shanghai Jiao Tong Univer-
sity, China. He is also the dean of the
Industrial and System Engineering Insti-
tute (Sino-US Global Logistics Institute,
SUGLI) of Shanghai Jiao Tong Univer-
sity. He received the Ph.D. degree of Engi-
neering Management from City University of Hong Kong.
He has authored or coauthored over 100 articles in interna-
tional journals such as Production and Operations Manage-
ment, INFORMS Journal on Computing, IEEE Transactions on
Automation Science and Engineering, Omega-The International
Journal of Management Science, and International Journal of
Production Research. He is currently serving as a fellow of Insti-
tute of Industrial and Systems Engineers and associate editor of
International Journal of Production Research. His research inter-
ests include production and service operations management,
healthcare service management, and logistics and supply chain
management.
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