An optimization model for network design of a closed-loop supply chain: a study for a glass manufacturing industry

Abstract

ABSTRACTClosed-Loop Supply Chain (CLSC) network design plays a significant role in supply chain performance. The CLSC network design is recognized as a strategic problem which ensures a useful and efficient supply chain management providing an optimal platform. The CLSC network design problem includes two types of decisions, strategic and tactical. This paper aims to determine the location of facilities which is recognized as a strategic decision. In addition, tactical decisions such as the amount of supplied raw material, the level of production, and shipments among the network entities are made through the proposed model. This paper is distinctive by introducing a Mixed Integer Linear Programming (MILP)-based model which simultaneously optimizes the both forward and reverse chains. The model is implemented on a glass manufacturing industry to highlight the importance and applicability of the framework. Moreover, the study provides a comprehensive sensitivity analysis to investigate the effect of parameters such as demand and return rates on strategic and tactical decisions in supply chain network.