Robust closed-loop supply chain design with presorting, return quality and carbon emission considerations

Abstract

In closed-loop supply chain (CSLC) networks, low return quality reduces the number of usable cores and hence affects the strategic decision of facility location and sizing. This problem can be overcome by adding presorting centers in the CLSC network since presorting costs are typically lower than the costs incurred at subsequent processing stages. Presorting centers can separate poor quality products at the start of the reverse logistics cycle and reduce transportation costs and emissions. In this paper, a deterministic mathematical model and its robust variant are proposed to investigate the effects of the quality of returns on the CLSC network under the carbon cap (CC) and carbon cap-and-trade (CCT) policies. Numerical experiments conducted with data from a real resource recovery company show the effects of varying return quality on total emissions and profit, the impact of presorting center efficiency and transportation cost on the opening of presorting centers, and the impacts of CC and CCT policies on the configuration of the CLSC network. The main insight of this paper is that the carbon cap policy affects the network structure much more than does the carbon cap and trade policy.