Modeling reverse logistics process in the agro-industrial sector: The case of the palm oil supply chain

Abstract

As today’s consumers are more and more concerned with the environmental impacts of products and services they buy, enterprises have been more and more concerned with “green operations”. One of the key aspects of green logistics management is reverse logistics. This paper shows how the potential of managing reverse logistics flows can be implemented in the agro-industrial sector. As an example, the palm oil supply chain is considered. This study is carried out under the focus of the “closed-loop supply chain (CLSC) framework” in which forward and backward product flows are considered simultaneously. A mathematical model is proposed in order to represent the dynamic interaction between flows. The objective function considers energy, cost and economic profits. Different implementation scenarios of recovery processes are proposed and interactions between direct and reverse flows in the chain are evaluated. Results are analyzed using proper statistical tools, showing that the simultaneous analysis of direct and reverse flows positively impact the net economic profits in this complex supply chain of the agro-industrial sector.