Integrated forward-reverse logistics system design an empirical investigation

This dissertation is concerned with taking an empirical approach to designing logistics systems that integrate both forward and reverse flows. Currently the literature has abundant reports separately addressing forward and reverse flow logistics systems. However, it is rare in academic journals to find studies of the synergy effects of integrating the two flows, even though many logistics companies practice both flows in their supply chain business. This dissertation fills a gap through considering both flows. This dissertation models the UPS (United Parcel Services) logistics business, proposing a reduced model developed by synthesizing all relevant literature pertaining to the topic, and a full model by incorporating other important components on the reduced model: price, transportation modes, and outsourcing costs. Due to the complexity of the mathematical models we applied a Monte Carlo simulation to solve them. In the analysis section, we proved the superiority of the full model in profit generation for UPS, in confirmatory analysis, and also discussed many important findings by contrasting the two models from exploratory analysis. The highlight of the dissertation is the identification of the role played by incorporating pricing into the model for UPS business. Traditional economics defines transaction volume and price by price elasticity. However, the price elasticity forlogistics firms has not been studied yet and hence we applied price elasticity in our analysis, assuming values ranged from 0.25 to 2 with a step value of 0.25. Since no literature has paid attention to the pricing effect in logistics firms the major contribution of this dissertation is a thorough analysis of the contribution of the pricing component in an integrated forward and reverse business and the synergy effects of combining the three components