Research on Location of Remanufacturing Factory

Based on Particle Swarm Optimization

Nan Li
Management School
Harbin University of Commerce
Harbin, China
e-mail: ln77@163.com
AbstractFocus on reverse logistics location of
remanufacturing factory, a mixed integer programming
model is constructed on the basis of minimun cost. Then
particle swarm optimization (PSO) algorithm is introduced
in the model. Discrete PSO is used to solve reverse logistics
location of remanufacturing factory, and the distribution
of goods is solved by traditional PSO algorithm. The
optimal solution of the model is obtained by nesting
discrete PSO and traditional PSO, which reduces the
calculation complexity, selects the reverse logistics
remanufacturing factory efficiently, and the network
structure of reverse logistics is optimized. The experiment
results show that the method is feasible and efficient.
Index
Termslocation
model,
remanufacturing factory, particle swarm

I.

reverse

logistics,

Particle swarm optimization (PSO) algorithm was firstly

put forward by Italian scholar Dorigo M in 1991[3]. Its essence
is a complicated intelligent system with the advantages of
stronger robustness, excellent distributed computing
mechanism, easy to combine with other methods etc.
Nowadays the research has penetrated into multiple
application fields, and the topic to solve one-dimensional static
optimization problem has developed into solve multidimensional dynamic optimization problem. Because PSO
algorithm is easy to operate and implement, which is widely
used in the field of function optimization, neural network
training, pattern classification and fuzzy control. Therefore,
PSO algorithm is proposed to solve reverse logistics location
of remanufacturing factory. A reasonable location of
remanufacturing factory is obtained by iterative search of PSO
algorithm[4].

INTRODUCTION

II.

Remanufacturing factory is the central hub of reverse

logistics network, as one of the elements constituting reverse
logistics system, which determines overall function
effectiveness of reverse logistics system. Location of
remanufacturing plant is the core issue in analyzing reverse
logistics system, as well as the premise to operate reverse
logistics system effectively. Choosing a rational location for
remanufacturing factory can effectively save costs, make sure
that logistics system gets the efficient and balanced
development, which has strategic significance for reverse
supply chain management.
[1-2]

Researchers
have paid great attentions to the methods
of logistics facilities location, which include analytic hierarchy
process (AHP), expert choice method, comparative analysis
method, fuzzy evaluation method, barycentric method, mixed
integer programming algorithm, etc. AHP, expert choice
method, comparative analysis method and fuzzy evaluation
method belong to the method of qualitative analysis, including
some subjective factors. Barycentric method is the simple
model to resolve setting one logistics facility, whose
maneuverability is poorer. Currently mixed integer
programming algorithm is the method commonly used, but it
has the character with NP hard. When the problem is large
and difficult to resolve, its important to find an efficient
algorithm for location of remanufacturing plant.

REVERSE LOGISTICS LOCATION MODEL OF

REMANUFACTURING FACTORY

Reverse logistics location of remanufacturing factory

belongs to the problem of minimum cost, namely, to find a
plan with smallest transportation cost, smallest sum between
variable costs and fixed costs in distribution center. This paper
mainly discusses reverse logistics location of remanufacturing
factory of single product, namely find the site in some known
alternative sites for location of remanufacturing factory of
single product.
Setting up a remanufacturing factory through a certain
number of locations, and getting the minimum total cost for
logistics network. To facilitate building the model, provided
that:
(a) Freight from recovery point to remanufacturing
factories, and to point of sale is considered as linear function;
(b) Capacity of remanufacturing factory can meet the
requirements;
(c) Demand for each point of sale is certain and known;
(d) Remanufacturing factory only can be selected within
certain scope.
Objective function is:
m

i =1 k =1

978-1-4244-8385-3/11/$26.00 2011 IEEE

1016

min F = Cik X ik + CkjYkj + Ck X ik + FkWk

k =1 j =1

i =1 k =1

(1)

k =1

MSIE 2011

Constraint conditions as follows:

q

X ik Ai , i=1,2,m

vidt +1 = w vidt + c1 r1 ( pid xid ) + c 2 r2 ( p gd xid )

(2)

xidt +1 = xidt + vidt +1

k =1

k =1
m

kj

B j , j=1,2,n
n

X ik = Ykj , k=1,2,q
i =1
m

X ik M kWk , k=1,2,q

(9)

(3)

vid [ vmax , vmax ]

(4)

Of which w is the momentum inertial coefficient;

j =1

i =1

(10)

xid [ xmax , xmax ]

the stringent factor to control speed.

(5)

(8)

(11)

is

t
id

x stands for position of

t

particle i located in dimension d when iteration t. vid stands

(6)

for the flying speed of particle i in dimension d when iteration

t. pid stands for individual optimal location, while

(7)

p gd stands for particle swarm optimal location. r1 and r2 are

While X ik stands for the purchase quantity from

random numbers obey U (0, 1). Learning factor c1 and c 2 are

1
Wk =
0

This optional point is not selected

This optional point is selected

X ik , Ykj 0
optional point k to recovery point i;

Ykj stands for the transit

quantity from optional point k to point of sale j; C ik stands for

unit delivery rate from recovery point i to optional point k;
Ckj stands for unit supplier rate from optional point k to point
of sale j; Fk stands for fixed cost when optional point k is
selected (including basic investment cost and fixed operation
cost ); Ck stands for management cost of unit circulation
volume of optional point k; Wk stands for whether optional
point k is selected as decision variable in remanufacturing
factory; m stands for quantity of recovery point; q stands for
quantity of optional point k; n stands for quantity of point of
sale; Ai stands for supply total quantity of each recovery
point; B stands for demand total quantity of each point of sale;
M k stands for the maximum volume of optional point k.
Formulas (2) stands for total volume of materials from
recovery point i to each optional point of remanufacturing
factory does not exceed its supply capacity; Formulas (3)
stands for total volume of materials from each
remanufacturing factory to point of sale j is not less than its
demand; Formulas (4) stands for balance between supply
amount and demand amount through remanufacturing factory
k; Formulas (5) stands for the demand amount of each
recovery point obtained by remanufacturing factory is not
more than its maximum capacity.
III.

PSO ALGORITHM

A. Traditional PSO Algorithm

In traditional PSO algorithm, each optimization solution
is indicated with a particle, each particle has position and
velocity. According to individual extreme value pi and global
extreme value p g , the optimal value is searched in the

nonnegative constants. vmax and xmax are constants set by

users. The termination condition of iteration is maximum
iterating times or the minimum fitness threshold which are
predefined.
B. Discrete PSO Algorithm
Traditional PSO algorithm mainly applies to optimization
of continuous space function, which is difficult to apply to
discrete space optimization. Kennedy and Eberhart [3] proposed
discrete binary PSO algorithm. The difference between binary
PSO algorithm and traditional PSO algorithm is that formulas
(9) has been replaced by (12).

1
xidt +1 =
0

rand () < S (vidt +1 )

rand () > S (vidt +1 )

(12)
v

While: S (v) ---Sigmoid function, S (v) = 1 (1 + e ) ,

rand ()---random Numbers of [0, 1].
IV.

LOCATION OF REMANUFACTURING FACTORY BASED ON

PARTICLE SWARM OPTIMIZATION

The location of remanufacturing factory is determined by

two sub-systems which are remanufacturing center selection
and cargo transport allocation. Selection of remanufacturing
center belongs to discrete optimization problem, while cargo
transport allocation belongs to continuous optimization
problem. So discrete binary PSO algorithm is applied to solve
remanufacturing factory selection, and traditional PSO
algorithm is adopted to solve cargo transport allocation.
Through nested call between traditional PSO algorithm and
discrete binary PSO algorithm, the model of remanufacturing
factory location is resolved. And get the value of X ik , Ykj and

Wk . ( X ik stands for purchase source of remanufacturing

factory k, Ykj stands for supply scale of remanufacturing
factory k ). Thus, selecting remanufacturing factory efficiently,
meanwhile determining the structure of logistics network.

solution space. For particle i with the iteration t+1, the formula
of traditional PSO algorithm is as follows:

1017

A. Particle Coding
Because location of remanufacturing factory includes two
optimization sub-problems, it also contains binary coding and
real number coding about particle encoding.
Remanufacturing factory location code: it adopts binary
coding, and the particle shows as X = (W1 , W2 , , Wk , , Wq ) ,

(e)

X = ( X 11 ,

, X ik ,

, X mq , Y11,

, Yqn ) .

, Ykj ,

B. Fitness Function
Penalty function is adopted to tackle the constraint
condition of location model of remanufacturing center. And
convert it into optimization problem of unconstrained
condition. Thus, in the optimization process, iteration points
are always in the range of feasible region. Finally the optimal
solution of the original model is obtained. So we choose the
fitness function as:
m

i =1

k =1

j =1

k =1

f = F + C [min(0, Ai X ik )]2 + M [min(0, Ykj B j )]2 +

m
N [min(0, M kWk X ik )]2 +
k =1
i =1

Y X
j =1

kj

i =1

ik

current

iteration

times

reach

maximum

to step (b).
(f) Output the optimal fitness value, optimal particle in
binary PSO, and optimal particle in traditional PSO algorithm,
then end.

the length of particle indicates the quantities of optional point

of remanufacturing factory. X=(0,0,1,0,1,1) shows the optional
point of W3 , W5 , W6 been selected.
Cargo transportation allocated code: it adopts real number
coding, the particle shows as

If

itermax1 , then stop iteration, execute (f). Otherwise go

iterating

V.

EXAMPLE

Suppose one reverse logistics system includes three

M ,M ,M

1
2
3 , available resources are 40,
collection points
60 and 50; six optional points of remanufacturing factory, they

L ,L ,L ,L ,L ,L

are 1 2 3 4 5 6 . Fixed cost and maximum capacity

are shown in table 1. Ten points of sales whose demand
capacity are shown in table 2. Each rate is shown from table 3
to table V.
TABLE OPTIONAL POINT FOR REMANUFACTURING FACTORY
Optional point

L1

L2

L3

L4

L5

L6

Maximum
capacity of
fixed cost

80
30

60
20

120
40

60
20

90
35

130
50

TABLE DEMAND AT POINT OF SALE

(13)

Users

D1

D2

D3

D4

D5

D6

D7

D8

D9

D10

Demand
capability

20

15

10

20

10

10

15

20

10

20

While C, M, N stand for larger positive integer.

TABLE UNIT RATE FROM RECOVERY POINT i TO OPTIONAL POINT k OF

REMANUFACTURING FACTORY
k
i
1
2
3
4
5
6
1
8
7
11
12
7
6
2
9
10
8
7
8
8
3
12
6
10
8
9
9

(a) Initialize binary PSO. Set the scale of particle swarm

N1 and the maximum iterating times itermax1 , then initial

particles occurs in the feasible domain of solution space.
(b) For particle i in binary PSO representing location
plan of remanufacturing factory, which adopts traditional PSO
algorithm to solve optimization of transport allocation.
a)Traditional PSO initialization; scale of particle swarm

N1 and the maximum iterating times itermax1 ;

1
2
3
4
5
6

b) According to formulas (11), calculate fitness function

value of each particle in traditional PSO, get individual
optimal value and global optimal value;

TABLE UNIT RATE FROM OPTIONAL POINT k OF REMANUFACTURING

FACTORY TO POINT OF SALE j
j
1
2
3
4
5
6
7
8
9
10
7
5
5
8
10
3
2
4
4
3
6
7
7
3
8
8
9
3
4
5
10
7
7
9
6
7
8
8
9
7
8
8
9
9
6
6
5
5
4
4
6
6
5
7
9
10
4
3
3
6
6
8
8
6
4
4
8
6
5
5

c) Iterate according to formulas (8) and (9);

TABLE MANAGEMENT RATE OF UNIT FLOW FOR OPTIONAL POINT

itermax1 , the optimal

d) If reach maximum iterating times
value and optimal particle will output. Otherwise go to b).

Optional point

L1

L2

L3

L4

L5

L6

Management rate of
unit flow

75

80

80

75

70

80

(c) Global extreme value can gain according to individual

extreme.

Nested PSO algorithm is adopted to get the optimal choice

of distribution center, what is: L1 , L2 , L4 , L5 , L6 . And the

(d) Iterate formulas (8) and (10) to calculate particle

position and speed in next-generation binary PSO.

result of cargo transport allocation is shown as table 6 and

table VII.

1018

logistics. Therefore, this paper has put forward reverse logistics

location of remanufacturing factory based on PSO. The case
indicates that this algorithm is an effective method to solve
location of remanufacturing factory. But it only discusses
location model of single item recovery, next step location
model of multi-item recovery will be in-depth study.

TABLE CARGO VOLUME TRANSPORTED FROM RECOVERY POINT i TO

REMANUFACTURING FACTORY k
k
i
1
2
4
5
6
1
0
0
0
0
40
2
30
0
14
16
0
3
0
20
6
19
5

k
1
2
3
4
5
6

TABLE CARGO VOLUME TRANSPORTED FROM REMANUFACTURING

FACTORY k TO POINT OF SALE j
j
1
2
3
4
5
6
7
8
9
0
15
0
0
0
0
15
0
0
0
0
0
20
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
5
0
0
10
0
0
0
0
20
5
20
0
0
0
10
10
0
0
0

ACKNOWLEDGMENT
The support of National Natural Science Foundation of
China (No. 71040001) in carrying out this research is gratefully
acknowledged.

10
0
0
0
15
0
5

REFERENCES
[1]

Above results show that compared with genetic algorithm,

an optimal distribution center can got by the method of
remanufacturing factory location based on PSO. Meanwhile,
the optimal goods distribution is obtained in the logistics
network which optimizes network structure of reverse logistics.
VI.

[2]
[3]
[4]

CONCLUSION

Remanufacturing center of reverse logistics plays an

important role in improving operation efficiency of logistics
network. How to choose to build up remanufacturing center has
become the key to success for network system of reverse

[5]

1019

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