A circular economy strategy to optimize textile waste collection under a bilevel optimization approach

The article addresses the design of a textile waste collection system for a private company, focusing on garment recovery. The objective is to determine optimal bin locations and citizen allocation, using population accessibility as a social metric. The company aims to maximize utility by selling collected garments to local remanufacturers specialized in upcycling. These remanufacturers set prices for the garments in each bin, accounting for their own profit margins and logistics costs. Consequently, the collection company decides on bin assignments based on sales utility and fixed location costs. The problem is formulated as a mixed-integer bilevel programming model where the upper level optimizes location and assignment, and the lower level determines pricing. To solve it, the model is reformulated into an equivalent single-level model using strong duality conditions and solved via CPLEX®. The model's viability is demonstrated through a practical case study in a municipality of Santiago, Chile. HighlightsBilevel model for urban textile waste recovery considering upcycling remanufacturers' participation.Integration of hierarchical strategies between the profit of the collectors and the upcycling remanufacturers.Exact solution approach via single-level reformulation using strong duality.Real-world validation with a case study that demonstrates model applicability.Analysis of how the concentration of upcycling remanufacturers affects profitability in textile recovery processes.