Addressing the uncertain quality and quantity of returns in closed-loop supply chains

Abstract

In this work a two-stage scenario-based modeling approach is proposed in order to simultaneously deal with the design and planning decisions in supply chain networks, where both forward and reverse flows are considered (closed-loop supply chains) subject to uncertain conditions. A mixed integer linear programming (MILP) approach is developed with the underlying objective of profit maximization. Planning takes into account raw material acquisition and processing, storage and distribution of several products flowing through the network. Uncertainty is associated to the quantity and quality of the flow of products of the reverse network, which are directly affected by customers and sorting centers, respectively. The approach considers, by means of scenarios, the simultaneous integration of two important uncertainty sources, thus presenting an important modeling advantage, i.e. that of providing a better understanding of the CLSCs. The applicability of the formulation is tested with a real sized example of a Portuguese glass company.