In this talk, we discuss our new approach to design reverse logistics models for dairy industries, in particular whey products. Whey is a by-product of cheese making with many applications spanning from dairy and meat to pharmaceuticals. We develop a hierarchical location-routing model for a whey recovery network design. In this class of models, the location and routing decisions are made simultaneously. As the problem is NP-hard, it may not be possible to solve even the small-size instances efficiently. We suggest different approaches such as adding valid inequalities and improving lower and upper bounds to solve the problem in a reasonable amount of time.