Optimizing a two-level closed-loop supply chain under the vendor managed inventory contract and learning: Fibonacci, GA, IWO, MFO algorithms

Abstract

This paper addresses a new multi-level serial closed-loop supply chain (CLSC) model with an integrated formulation of batch deliveries, quality-dependent return rate, random defective rate, rework process, and learning effects. The vendor managed inventory contract has motivated companies to cope with the bullwhip effect and its associated shortages. However, getting precise information on manufacturing/remanufacturing time is a challenge owing to human learning. Accordingly, this paper tries to incorporate the learning effect on the inventory control problem. This is a bridge to fill the gaps in the literature by considering how the learning process affects the production time and system costs in a CLSC problem. Moreover, the mean-standard deviation utility function is used in order to take the random defective rate into account, to minimize mean system costs with respect to the standard deviation. Due to the complexity of the proposed mixed-integer nonlinear programming model, three metaheuristic algorithms named, genetic algorithm, invasive weed optimization algorithm, and moth flame optimization algorithm are used to solve the problem, and Fibonacci algorithm will examine the validity of the applied methods. Two sets of numerical examples in small, medium, and large sizes are presented to illustrate the performance of the algorithms in terms of objective function values and required CPU-time. Afterward, a statistical analysis is utilized in order to evaluate the proposed algorithms. Finally, the results show how significantly the learning effect in manufacturing/remanufacturing time affects the costs of CLSC problem.