Centralized versus decentralized decision-making for recycled material flows.

A reverse logistics system is a network of transportation logistics and processing functions that collect, consolidate, refurbish, and demanufacture end-of-life products. This paper examines centralized and decentralized models of decision-making for material flows and associated transaction prices in reverse logistics networks. We compare the application of a centralized model for planning reverse production systems, where a single planner is acquainted with all of the system information and has the authority to determine decision variables for the entire system, to a decentralized approach.