Complete Closed-loop Supply Chain Network Design under Uncertainty of Demand and Return Products

Document Type: Research Paper


Department of Industrial Engineering, Sharif University of Technology, Tehran, Iran


In this research, we focus on complete closed loop supply chain, which includes forward and backward flows of materials. So a network has been considered including suppliers, manufacturers, distributers, customers, and collecting and disposal centers. In addition, to conform to real word conditions, and examine uncertainty of demands returns, scenario technic was used. In this research, we used a mixed integer linear programming model to minimize total cost of supply chain. The location of the facility, the production quantity of different products in each sites, and the flow of products between different nodes of network are the decision variables of the model. The computational complexity of the model, leads us to develop a particle swarm optimization algorithm to solve the problem in large-scale cases. Results show the efficiency of proposed algorithm in uncertain situations.


Main Subjects

1. Fleischmann, M., Bloemhof-Ruwaard, J. M., Dekker, R., Van der Laan, E., Van Nunen, J. A. and Van Wassenhove, L. N. (1997). "Quantitative models for reverse logistics: A review",  European Journal of Operational Research, Vol. 103, No. 1, PP. 1-17.

2. Baumgarten, H., Butz, C., Fritsch, A.  and Sommer-Dittrich, T. (2003). “Supply chain management and reverse logistics-integration of reverse logistics processes into supply chain management approaches”, In  Electronics and the Environment, IEEE International Symposium on. IEEE, PP. 79-83.

3. Daskin, M. S. (1995). Network and discrete location: Models, algorithms, and applications, Wiley, New York.

4. Melo, M.  T., Nickel, S.  and Gama, F.  S. (2009). “Facility location and supply chain management”, European Journal of Operation Research, Vol. 196, No. 2, PP. 401-412.

5. Melkote, S. and Daskin, M.  S.  (2001).  “Capacitated  facility  location/network  design  problem”,  European Journal of Operation Research, Vol. 129, No. 3, 481-495.

6. Yaghoubi, et al. (2016). "Location and Allocation of a Distribution System Considering Disruption in Mobile Warehouses and Backup Facilities", Journal of Industrial Engineering, Vol.50, No.1, PP. 147-164.

7. Ambrosino, D. and Scutella, M. G. (2005). “Distribution network design: New problems and related models”, European Journal of Operational Research, Vol. 165, No. 3, PP. 610-624.

8. Nga Thanh, P., Bostel, N.  and Peton, O.  (2008). “A dynamic model for facility location in the design of Complex supply chains”, International Journal of Production Economics, Vol. 113, No. 2, PP. 678-693.

9. Louwers, Dirk, et al. (1999). "A facility location allocation model for reusing carpet materials", Computers & Industrial Engineering, Vol. 36, No. 4,: PP. 855-869.

10. Lu, Z. and Bostel, N. (2007). “A facility location model for logistics systems including reverse flows: The case of remanufacturing activities”, Computers & Operations Research, Vol. 34, No. 2, 299–323.

11. Pishvaee, M. S. and Shakouri, H. (2009, November). A System Dynamics Approach for Capacity Planning and Price Adjustment in a Closed-Loop Supply Chain. In Computer Modeling and Simulation, 2009. EMS'09. Third UKSim European Symposium on (pp. 435-439). IEEE.‏

12. Chopra, S. and Meindl, P. (2007). Supply chain management. Strategy, planning & operation. Das summa summarum des management, 265-275.‏

13. Fleischmann, Moritz, et al. (2001). "The impact of product recovery on logistics network design", Production and operations management, Vol. 10, No. 2, PP. 156-173.

14. Jayaraman, V., Guide Jr, V. D. R. and Srivastava, R. (1999). "A closed-loop logistics model for remanufacturing", Journal of the operational research society, Vol.50, No.5, PP. 497-508.

15. Fleischmann, M. et al. (2001). "The impact of product recovery on logistics network design", Production and operations management, Vol. 10, No. 2, PP. 156-173.

16. Seuring, S. (2013). “A review of modeling approaches for sustainable supply chain management”, Decision Support Systems, Vol. 54, No. 4, PP. 1513-1520.

17. Minner, S. (2003). “Multiple-supplier inventory models in supply chain management: A review”, International Journal of Production Economics, Vol. 81-82, PP. 265-279.

18. Salema, M. I. G., Barbosa-Povoa, A. P., and Novais, A. Q. (2007). An optimization model for the design of a capacitated multi-product reverse logistics network with uncertainty. European Journal of Operational Research, Vol.179, No.3, 1063-1077.‏

19. Baghalian, A., Rezapour, S. and Farahani, R. Z. (2013). “Robust supply chain network design with service level against disruptions and demand uncertainties: A real-life  case”,  European Journal of Operational Research, Vol. 227, No. 1, PP. 199- 215.

20. Pishvaee, M. S., Rabbani, M. and Torabi, S. A. (2011). A robust optimization approach to closed-loop supply chain network design under uncertainty. Applied Mathematical Modelling, Vol. 35, No. 2, 637-649.‏

21. Amin, S. H. and Zhang, G. (2012). An integrated model for closed-loop supply chain configuration and supplier selection: Multi-objective approach. Expert Systems with Applications, Vol. 39, No. 8, 6782-6791.‏

22. Amin, S. H. and Zhang, G. (2013). A multi-objective facility location model for closed-loop supply chain network under uncertain demand and return. Applied Mathematical Modelling, Vol. 37, No. 6, 4165-4176.‏

23. Mirghafoori, H. (2001). Mathematical planning of supply chain of Yazd tire industry, Ph.D. Thesis in production management, Tabiat Modarress University.

24. El-Sayed, M., Afia, N. and El-Kharbotly, A. (2010). A stochastic model for forward–reverse logistics network design under risk. Computers & Industrial Engineering, Vol. 58, No. 3, 423-431.‏

25. Zhang, W. and Xu, D. (2014). Integrating the logistics network design with order quantity determination under uncertain customer demands. Expert Systems with Applications, Vol. 41, No. 1, 168-175.‏

26. Yousefi, B. A. and Shishebori, D. (2015). "Robust optimization of integrated reverse logistic network design at uncertain conditions", Journal of Industrial Engineering, Vol.49, No.2, PP. 299-313.

27. Saffar, M., Ganjavi, M., Shakouri, H. and Razmi, J. (2015). "A green closed loop supply chain network design considering operational risks under uncertainty and solving the model with NSGA II algorithm", Journal of Industrial Engineering, Vol.49, No.1,  PP. 55-68.

28. Eberhart, R. and Kennedy, J. (1995, October). A new optimizer using particle swarm theory. In Micro Machine and Human Science, 1995. MHS'95., Proceedings of the Sixth International Symposium on (pp. 39-43). IEEE.‏

29 Eberhart, R. C. (1997). “A discrete binary version of  the  particle swarm algorithm”, In: Proceedings of 1997 conference systems man cyber-netics, NJ: Piscataway, PP. 4104–4108.

30. Roy, R. K., A primer on the Taguchi method. 2nd ed. 2010, Dearborn, MI: Society of Manufacturing Engineers.