The Optimization Model and Algorithm of Remanufacturing Supply Chain Logistics Network with Option Contracts

Abstract

By the point of view of remanufacturing enterprise, the studies of supply chain logistics network optimization problem focused on network optimization and logistics distribution between manufacturing enterprise and customer area. The present business environment is full of uncertainties. To compete effectively in such an environment, remanufacturing enterprises need to develop the capability of responding flexibly to changing market conditions and optimize effectively logistics networks. The mechanism of option contracts has effectively coordinated the relationship of remanufacturing enterprise and retailer and hedged against the risks of over- and under-production. There is few papers considers the mechanism of option contracts although there are lots of studies on supply chain logistics networks optimization problem. Therefore, the mechanism of option contracts is led into the study of remanufacturing supply chain logistics networks optimization problem. Considering environmental pollution influence factors in the remanufacturing process, a multi-objective optimization model of supply chain is developed. Dual-layer genetic algorithm mechanism was brought up. The first layer is responsible for supply chain logistics network structure with genetic algorithm. The second layer answers for specific supply chain logistics distribution with adaptive immune genetic algorithm. Finally, numerical examples demonstrate the validity of the model and algorithm for the optimization problem.