Closed-Loop Supply Chain Design and Pricing in Competitive Conditions by Considering the Variable Value of Return Products Using the Whale Optimization Algorithm

Muhammad Salman Shabbir,Anna Valeryevna Pilyugina,Dinara A Valiullina,Andrey Leonidovich Poltarykhin,Lis M Yapanto,Ahmed Faisal Siddiqi,Amin Foroughi,Aleksandr Mikhailovich Petrov,Evgeny E Tonkov

doi:10.3390/su13126663

Abstract

In today’s competitive environment, organizations, in addition to trying to improve their production conditions, have a special focus on their supply chain components. Cooperation between supply chain members always reduces unforeseen costs and speeds up the response to customer demand. In the new situation, according to the category of return products and their reprocessing, supply chains have found a closed-loop structure. In this research, the aim was to design a closed-loop supply chain in competitive conditions. For this purpose, the key decisions of this chain included locating retail centers, adjusting the inventory of chain members, and selling prices of final products, optimally determined. For this purpose, a nonlinear integer mathematical model is presented. One of the most important innovations of this research was considering the variable value for return products. Then, in order to solve the proposed model, a whale optimization algorithm was developed. Numerical results from the sample examples showed that the whale algorithm had a very good performance in terms of response quality and speed-of-action in finding the optimal solution to this problem.

Highlights

A supply chain can be viewed as a network in which raw materials, semi-finished products, and finished products flow toward consumers, cash flows backward toward suppliers and manufacturers, and information flows in both directions [1,2]
In the presented formulations, M denotes the number of potential points for establishing retail facilities, V1 is the set of potential points for retailers, V2 is the set of customer points, C denotes the cost of manufacturing the product, p is the selling price of the product, and s is the value of the returned product for the manufacturer
This paper presented a new model for three-level closed-loop supply chain networks operating under competitive conditions with the objective of optimizing retailer locations, inventory levels, and selling prices for cost minimization

Summary

Introduction

A supply chain can be viewed as a network in which raw materials, semi-finished products, and finished products flow toward consumers, cash flows backward toward suppliers and manufacturers, and information flows in both directions [1,2]. There are different definitions of supply chain management in the literature. The reason for these differences is the difference in the views and perspectives of people who define this concept [3]. The act of coordinating the entities involved in the chain is cited as one of the most important goals of supply chain management. A supply chain tries to maximize the overall profit of the chain. In the absence of this coordination, chain components would only try to maximize their own profit independently of each other, which would hinder the profitability of the chain

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