Collector Managed Inventory, a Proactive Planning Approach to the Collection of Liquids Coming from End-of-Life Vehicles

CentER Discussion Paper No. 2004-22

24 Pages Posted: 24 Jun 2004

See all articles by H.M. Le Blanc

H.M. Le Blanc

affiliation not provided to SSRN

M.G.C. van Krieken

affiliation not provided to SSRN

Hein Fleuren

Tilburg University - Center for Economic Research (CentER)

H. R. Krikke

Tilburg University - Center and Faculty of Economics and Business Administration

Date Written: 2004

Abstract

In this article, we introduce Collector Managed Inventory (CMI) as the reverse logistics counter part of Vendor Managed Inventory (VMI). The collection company takes responsibility for the inventories of cores or materials to be recycled. Experience in forward supply chain management has shown the potential of VMI by bringing the coordination of transportation and inventory decisions to the same supply chain entity. Using information technology called telemetry, we are able to monitor inventory levels at distance. We introduce a proactive planning methodology based on two types of collection orders: must- and can-orders. Every collection period all must-orders have to be collected, while can-orders are only collected if they can be combined beneficially with the must-orders. The routing problem is solved by a combination of route generation and set partitioning. The system is illustrated in a real-life case study for Auto Recycling Nederland on the collection of liquids coming from end-of-life vehicles, such as coolant and oil. In several scenarios, the old reactive approach is compared to the proactive approach resulting in cost savings up to about 19%.

Keywords: Closed-loop supply chains, reverse logistics, vehicle routing, set partitioning, distribution planning, information technology, remote monitoring

Suggested Citation

Le Blanc, H.M. and van Krieken, M.G.C. and Fleuren, Hein and Krikke, H. R. R., Collector Managed Inventory, a Proactive Planning Approach to the Collection of Liquids Coming from End-of-Life Vehicles (2004). CentER Discussion Paper No. 2004-22. Available at SSRN: https://ssrn.com/abstract=557763 or http://dx.doi.org/10.2139/ssrn.557763

H.M. Le Blanc (Contact Author)

affiliation not provided to SSRN

M.G.C. Van Krieken

affiliation not provided to SSRN

No Address Available

Hein Fleuren

Tilburg University - Center for Economic Research (CentER) ( email )

P.O. Box 90153
Tilburg, 5000 LE
Netherlands

H. R. R. Krikke

Tilburg University - Center and Faculty of Economics and Business Administration ( email )

P.O. Box 90153
Tilburg, 5000 LE
Netherlands

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