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Abstract
The integration of entire supply and value chain into a closed loop network is gaining more importance in recent times in order to ensure a business to be economically and environmentally sustainable with the changing trends in business and social environments, growing environmental consciousness in the society and government legislations to protect the environment as well as the business. In this context, this paper considers a multi-echelon closed loop supply chain network design with forward and reverse logistics components. An attempt has been made to develop a mixed integer non-linear programming model for this problem with different costs so that the sum of the total cost is minimized subject to different constraints pertaining to capacities of the entities of the system, demands of first customers and second customers. A generalized model is presented and then its application is illustrated using an example problem by solving the model using LINGO14. This model forms as a tool to compare future meta-heuristics to check the closeness of their solutions with corresponding optimal solutions.
Highlights
A supply chain network design is the most important strategic decision of supply chain management for anyHow to cite this paper: Aravendan, M. and Panneerselvam, R. (2014) An Integrated Multi-Echelon Model for a Sustainable Closed Loop Supply Chain Network Design
We propose an integrated forward-reverse logistics model for a closed loop network design which addresses the problem of escalating costs in establishing and implementing an effective supply chain network
The assumptions and limitations of the proposed model are considered as follows: 1) The model is for a single product and single period network design; 2) The locations of the first customers and second customers are known and are with certain demands; 3) The quantities of products returned are certain and all the products supplied are returned as end of life product returns (EOL) products and repair product; 4) 60% of the products supplied are returned as EOL products and 40% are returned as repair product; 5) 50% of the EOL products are returned via retailers and remaining 50% of the EOL products are returned directly, to the Collectors/Dismantlers/Re-furbishers (CDR); 6) Out of the total returned EOL products, 30% are refurbishable items, 45% are remanufacturable items, 20%
Summary
A supply chain network design is the most important strategic decision of supply chain management for any. Market and supply resources to facilities have a significant impact on the supply chain performance because they affect the total production, inventory and transportation costs incurred by the supply chain to satisfy customer demands. This decision should be reconsidered on a regular basis so that the allocation can be changed as market conditions or plant capacities change. We propose an integrated forward-reverse logistics model for a closed loop network design which addresses the problem of escalating costs in establishing and implementing an effective supply chain network.
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