A Novel Sustainable Closed-loop Supply Chain Network Design by Considering Routing and Quality of Products

Authors

College of Engineering, Department of Industrial Engineering, Shahed University, Tehran, Iran

Abstract

One of the strategic decisions that can be made in supply chain is designing its network which has high impact on costs, and satisfaction level of customers. This paper focuses on designing a distribution network including determining the number and location of facilities, how to allocate the customers in network, and also determining the extent of carrying different products from different origins to different destinations; in this distribution network, according to the existing restrictions, customer demand is considered at minimum cost. In addition to secondary chain and reuse market as a retrieval option, model flexibility in defining quality and routing-locating is also among the innovation points of the model. Firstly, in forward chain the model consists of supplier, manufacturer, warehouse, distributor, and customer. In reverse chain, the model includes reuse market, secondary supply chain, collection, reprocess and disposal centers. The model could be generalized to industries with various strategies. Secondly, a sensitivity analysis was performed on a numerical example; also the non-dominated sorting algorithm (NSGA II) was used for a large-sized sample; which its performance was measured by analysis of variance (ANOVA) test. The results show that, returned products with average quality lead to lower costs and higher social benefits; and meta-heuristic NSGA II method is efficient. Because, it creates business opportunities and leads to less economic and environmental costs.

Keywords