A Mixed-Integer Linear Programming Model of Closed Loop Supply Chain Network for Manufacturing System

Abstract

In the present scheme of things, in a manufacturing industry inventory is pitched as one of the significant resources that require to be handled effectively. The aim of this research article is to develop a mixed-integer linear programming model to configure the closed loop supply chain (CLSC) network and that could be optimized for maximizing the profit by determining the fixed order quantity inventory policy in various sites at multiple periods. The objective is to maximize the profit through CLSC by determining the optimal inventory of product and part mix during multiple periods. In onward supply chain, a standard inventory policy is followed when the product moves from manufacturer to end user, but it is very difficult to manage the inventory in the reverse supply chain of the product with the same standard policy. The proposed model examines the standard policy of fixed order quantity by considering three major types of return-recovery pair such as, commercial returns, end-of-use returns, end-of-life returns and their inventory positioning at multiple periods. Raw material supplier, manufacturer, distributer, retailer, customers and for major returns-collection sites like repair site, disassembly site, recycling site and disposal site were included in the network to develop this CLSC network model. The proposed model to configure the CLSC network has been solved by using IBM ILOG CPLEX OPL studio and the results of the model were analysed with numerical investigations followed by sensitivity analysis.