Reverse logistics alliance and its consolidation algorithm

Reverse logistics has the features of scattered, uncertainty and small volume. It is very difficult to reach the economies of scale. Based on the analysis of current reverse logistics practices, a new kind of reverse logistics alliance is developed. Two potential kinds of reverse logistics alliance are proposed and its core issues are outlined. In order to reducing the costs of reverse logistics, a reverse logistics alliance must consolidate small volume of scattered reverse logistics tasks with similar attributes into full load tasks to reach economies of scale. A consolidation algorithm based on cluster is proposed to cluster the reverse logistics tasks according to their proximity. Computational tests validate the research. Using the consolidation results, it is easy to make a reverse logistics service plan. This research provides fundamental analysis for optimal resources configuration for reverse logistics alliance.