Scenario-based designing of closed-loop supply chain with uncertainty in returned products

Abstract

Closed-loop supply chain management is an effective and efficient solution for a set of activities to retrieve a product from a customer and improve its value or to dispose it. Today, designing and planning a closed-loop chain is an inevitable but difficult task. In this research, a scenario-based modeling approach is presented by considering both forward and reverse flows as a closed-loop supply chains in steel industry. The proposed study also develops a multi-product and multi-period model based on a mixed integer linear programming (MILP) approach for profit maximization. The study also considers uncertainty in the amount of raw material, processing, storage and distribution of several products flow. Uncertainty is associated with the quantity and quality of the products in the reverse flow, which are directly affected by customers and sorting centers, respectively. Finally, the model is deployed in Steel industry with real data. The results show that by increasing the quality level of returned products the need for raw materials is reduced and the total profit of the supply chain is increased.

Keywords

• Closed-Loop Supply Chain
• Reverse Logistics
• Scenario Planning
• Steel Industry