Bi-Level Programming Model for the Design of a Municipal Solid Waste Management Network by Holding Tenders

In this study, the design of a network for municipal solid waste management has been studied from the viewpoint of an organization (e.g. Municipality) which collects different types of waste from all over the city and pays waste generation points in exchange for waste. Determining purchase price for waste and forming outsourcing policies are matters to be decided upon. In case of outsourcing, auction will be held and the private company who their business is recycling and composting can participate by bidding, which results in the selection of an organization or non-outsourcing. The problem is modelled as a bi-level model, in the first level, Municipality decides as the leader on outsourcing, and if outsourcing is agreed upon, a company is selected. In the second level, bidders compete as followers in the auction for receiving more waste from the organization and offer prices.