Coordinating a green reverse supply chain in pharmaceutical sector by negotiation

Abstract

This paper investigates the pharmaceutical reverse supply chain. For this industry, the reverse supply chain is usually not owned by a single company. A decentralized negotiation process is thus presented in order to coordinate the collection of unwanted medications at customer zones. Using a Lagrangian relaxation method, the model is solved for a real generic pharmaceutical company. Coordination efforts are required from the supply chain entities, facing environmental regulations, to collect and recycle unwanted medications. Therefore, a bonus sharing technique is also proposed based on each entity’s investment in the coordination process. Some numerical results are presented and discussed for two case studies. It shows that up to 28% more products could be collected if companies coordinate their operations efficiently. Besides, future insights on the same network are highlighted.