Disposition decisions in reverse logistics: Graph theory and matrix approach

Reverse logistics has become an essential part of business because of legislation, environmental concerns, and corporate social responsibility. Reverse logistics activities involve the collection of returned products, inspection and sorting out into different categories, and disposition them for reuse, repair, remanufacturing or recycling. One of the important decisions is to disposition returned products appropriately for the success of reverse logistics. Disposition decision plays an important role in the performance of reverse logistics. Perusal of previous literature indicates that there are very few studies related to disposition of returned products in reverse logistics. This paper attempts to explore the various disposition alternatives and develop an approach for the selection of best disposition alternative using graph theory and matrix approach. A case of mobile manufacturing firm is discussed for the illustration of this approach. The firm has to select best disposition alternative among four identified alternatives such as returned products for repair or reuse and resell as new; or repair or refurbish and resell; or re-manufacture and sell; or recycle. Different disposition attributes are identified based on literature review and experts opinion. Graph theory and matrix approach has been applied to select the best alternative. Permanent function value, referred as “Disposition Index” was evaluated for each alternative with the help of C++ program and alternatives were prioritized based on these values. The results show that firm must repair or reuse and resell the returned mobile phones as new in present business scenario in India. In addition, recycling must be preferred over remanufacturing of returned mobile phones. The study prioritized alternatives for disposition of returned products in reverse logistics appropriately. The findings of the study will provide useful insight to the supply chain managers and researchers for disposition decision-making in reverse logistics.