A Two-Stage Algorithm for the Closed-Loop Location-Inventory Problem Model Considering Returns in E-Commerce

Abstract EN

Facility location and inventory control are critical and highly related problems in the design of logistics system for e-commerce.

Meanwhile, the return ratio in Internet sales was significantly higher than in the traditional business.

Focusing on the existing problem in e-commerce logistics system, we formulate a closed-loop location-inventory problem model considering returned merchandise to minimize the total cost which is produced in both forward and reverse logistics networks.

To solve this nonlinear mixed programming model, an effective two-stage heuristic algorithm named LRCAC is designed by combining Lagrangian relaxation with ant colony algorithm (AC).

Results of numerical examples show that LRCAC outperforms ant colony algorithm (AC) on optimal solution and computing stability.

The proposed model is able to help managers make the right decisions under e-commerce environment.