Incorporating economies of scale into facility location problems in carpet recycling

The Carpet America Recovery Effort (CARE) set a goal to divert 40% of used carpet from landfills in the United States by 2012, but only achieved a 10% diversion rate. To achieve the 40% diversion rate, approximately 1.4 billion lbs would need to have been diverted. Diverting this significant quantity may require the design of a larger, more effective reverse logistics network to process the used materials. A new facility location heuristic originally developed for the forward distribution of products is applied to the reverse logistics system for carpet recycling. The objective is to locate an unknown number of carpet recycling facilities to minimize the total cost. The model includes transportation costs, as well as fixed facility and processing costs at the recycling plant, the latter exhibiting economies of scale (EOS) as the facility size increases. We evaluate the model using data from the CARE collection network in the continental United States and compare these findings to models that assume a significant increase in collection locations and rates to meet specific carpet diversion targets. We show the impact of EOS of the recycling facilities on the solution structure, as well as the impact that collection volumes have on the solution.