Abstract

The importance of considering forward and backward flows simultaneously in supply chain networks spurs an interest to develop closed-loop supply chain networks (CLSCN). Due to the expanded scope in the supply chain, designing CLSCN often faces significant uncertainties. This paper proposes a fuzzy multi-objective mixed-integer linear programming model to deal with uncertain parameters in CLSCN. The two objective functions are minimization of overall system costs and minimization of negative environmental impact. Negative environmental impacts are measured and quantified through CO2 equivalent emission. Uncertainties include demand, return, scrap rate, manufacturing cost and negative environmental factors. The original formulation with uncertain parameters is firstly converted into a crisp model and then an aggregation function is applied to combine the objective functions. Numerical experiments have been carried out to demonstrate the effectiveness of the proposed model formulation and solution approach. Sensitivity analyses on degree of feasibility, the weighing of objective functions and coefficient of compensation have been conducted. This model can be applied to a variety of real-world situations, such as in the manufacturing production processes.

Highlights

  • The increasing need for re manufacturing, the growing market competition, and the concern on negative environmental impacts have spurred significant interest in closedloop supply chain network (CLSCN) adoption in manufacturing industry

  • More attention has been paid to the closed-loop supply chain systems as they provide additional profits by collecting end-of-life units and re-manufacturing them for consumption which recovers the value of production

  • Closed-loop supply chain systems extend it by collecting defective/used products from customers, classifying them based on the condition, re-manufacturing the recoverable units and sending recovered products back to the customers

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Summary

Introduction

The increasing need for re manufacturing, the growing market competition, and the concern on negative environmental impacts have spurred significant interest in closedloop supply chain network (CLSCN) adoption in manufacturing industry. The design of a supply chain network often involves long-term strategic decisions which have sustaining impact in business operations. It is essential to incorporate uncertainties into the design of CLSCN such that the decisions in the supply chain network configuration are efficient and robust. We proposed a novel multi-objective CLSCN model to minimize overall system costs and negative environmental impact. To the best of authors’ knowledge, fuzzy programming has not been applied to CLSCN problems with system cost and environmental impact objectives. We studied multiple uncertain parameters such as demand, return, scrap rate, processing costs and environmental impact.

Literature Review
Model Formulation
Constraints
The Proposed Solution Method
The Equivalent Auxiliary Crisp Model
The Fuzzy Solution Approach
Computational Experiments
Sensitivity Analysis on α
Sensitivity Analysis on θ1 and θ2
Sensitivity Analysis on γ
Conclusions

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