An Integrated Multi-Echelon Model for a Sustainable Closed Loop Supply Chain Network Design
Affiliation(s)
1 Department of Leather Design (Footwear & Products), National Institute of Fashion Technology, Chennai, India. 2 Department of Management Studies, School of Management, Pondicherry University, Pondicherry, India.
1 Department of Leather Design (Footwear & Products), National Institute of Fashion Technology, Chennai, India. 2 Department of Management Studies, School of Management, Pondicherry University, Pondicherry, India.
ABSTRACT
The integration of entire supply and value chain into a closed loop network is gaining more importance in recent times in order to ensure a business to be economically and environmentally sustainable with the changing trends in business and social environments, growing environmental consciousness in the society and government legislations to protect the environment as well as the business. In this context, this paper considers a multi-echelon closed loop supply chain network design with forward and reverse logistics components. An attempt has been made to develop a mixed integer non-linear programming model for this problem with different costs so that the sum of the total cost is minimized subject to different constraints pertaining to capacities of the entities of the system, demands of first customers and second customers. A generalized model is presented and then its application is illustrated using an example problem by solving the model using LINGO14. This model forms as a tool to compare future meta-heuristics to check the closeness of their solutions with corresponding optimal solutions.
The integration of entire supply and value chain into a closed loop network is gaining more importance in recent times in order to ensure a business to be economically and environmentally sustainable with the changing trends in business and social environments, growing environmental consciousness in the society and government legislations to protect the environment as well as the business. In this context, this paper considers a multi-echelon closed loop supply chain network design with forward and reverse logistics components. An attempt has been made to develop a mixed integer non-linear programming model for this problem with different costs so that the sum of the total cost is minimized subject to different constraints pertaining to capacities of the entities of the system, demands of first customers and second customers. A generalized model is presented and then its application is illustrated using an example problem by solving the model using LINGO14. This model forms as a tool to compare future meta-heuristics to check the closeness of their solutions with corresponding optimal solutions.
KEYWORDS
Closed Loop, Forward, Integrated Model, Multi-Echelon, MINLP, Network Design, Responsiveness, Reverse, Sustainable
Closed Loop, Forward, Integrated Model, Multi-Echelon, MINLP, Network Design, Responsiveness, Reverse, Sustainable
Cite this paper
Aravendan, M. and Panneerselvam, R. (2014) An Integrated Multi-Echelon Model for a Sustainable Closed Loop Supply Chain Network Design. Intelligent Information Management, 6, 257-279. doi: 10.4236/iim.2014.66025.
Aravendan, M. and Panneerselvam, R. (2014) An Integrated Multi-Echelon Model for a Sustainable Closed Loop Supply Chain Network Design. Intelligent Information Management, 6, 257-279. doi: 10.4236/iim.2014.66025.
References
[1] Krikke, H., Ruwaardz, J.B. and Van Wassenhove, L.N. (2003) Concurrent Product and Closed-Loop Supply Chain Design with an Application to Refrigerators. International Journal of Production Research, 41, 3689-3719.
http://dx.doi.org/10.1080/0020754031000120087 [2] Schultmann, F., Zumkeller, M. and Rentz, O. (2006) Modeling Reverse Logistic Tasks within Closed-Loop Supply Chains: An Example from the Automotive Industry. European Journal of Operational Research, 171, 1033-1050.
http://dx.doi.org/10.1016/j.ejor.2005.01.016 [3] Salema, M.I.G., Povoa, A.P.B. and Novais, A.Q. (2007) An Optimization Model for the Design of a Capacitated Multi-Product Reverse Logistics Network with Uncertainty. European Journal of Operational Research, 179, 1063-1077.
http://dx.doi.org/10.1016/j.ejor.2005.05.032 [4] Staikos, T. and Rahimifard, S. (2007) A Decision-Making Model for Waste Management in the Footwear Industry. International Journal of Production Research, 45, 4403-4422.
http://dx.doi.org/10.1080/00207540701450187 [5] Ko, H.J. and Evans, G.W. (2007) A Genetic Algorithm-Based Heuristic for the Dynamic Integrated Forward/Reverse Logistics Network for 3PLs. Computers & Operations Research, 34, 346-366.
http://dx.doi.org/10.1016/j.cor.2005.03.004 [6] Lu, Z. and Bostel, N. (2007) A Facility Location Model for Logistics Systems Including Reverse Flows: The Case of Remanufacturing Activities. Computers & Operations Research, 34, 299-323.
http://dx.doi.org/10.1016/j.cor.2005.03.002 [7] Du, F. and Evans, G.W. (2008) A Bi-Objective Reverse Logistics Network Analysis for Post-Sale Service. Computers & Operations Research, 35, 2617-2634.
http://dx.doi.org/10.1016/j.cor.2006.12.020 [8] Lee, D.H. and Dong, M. (2008) A Heuristic Approach to Logistics Network Design for End-of-Lease Computer Products Recovery. Transportation Research Part E, 44, 455-474.
http://dx.doi.org/10.1016/j.tre.2006.11.003 [9] Lee, D.H. and Dong, M. (2009) Dynamic Network Design for Reverse Logistics Operations under Uncertainty. Transportation Research Part E, 45, 61-71.
http://dx.doi.org/10.1016/j.tre.2008.08.002 [10] Lin, L., Gen, M. and Wang, X. (2009) Integrated Multistage Logistics Network Design by Using Hybrid Evolutionary Algorithm. Computers & Industrial Engineering, 56, 854-873.
http://dx.doi.org/10.1016/j.cie.2008.09.037 [11] Mutha, A. and Pokharel, S. (2009) Strategic Network Design for Reverse Logistics and Remanufacturing Using New and Old Product Modules. Computers & Industrial Engineering, 56, 334-346.
http://dx.doi.org/10.1016/j.cie.2008.06.006 [12] Salema, M.I.G., Povoa, A.P.B. and Novais, A.Q. (2009) A Strategic and Tactical Model for Closed-Loop Supply Chains. OR Spectrum, 31, 573-599.
http://dx.doi.org/10.1007/s00291-008-0160-5 [13] Dahel, N.E. (2010) Modeling Supply Chain Network Design and Product Recovery Planning under Uncertainty. Northeast Decision Sciences Institute Proceedings, Virginia, 26-28 March 2010, 714-719. [14] Salema, M.I.G., Povoa, A.P.B. and Novais, A.Q. (2010) Simultaneous Design and Planning of Supply Chains with Reverse Flows: A Generic Modeling Framework. European Journal of Operational Research, 203, 336-349.
http://dx.doi.org/10.1016/j.ejor.2009.08.002 [15] El-Sayed, M., Afia, N. and El-Kharbotly, A. (2010) A Stochastic Model for Forward-Reverse Logistics Network Design under Risk. Computers & Industrial Engineering, 58, 423-431.
http://dx.doi.org/10.1016/j.cie.2008.09.040 [16] Pishvaee, M.S., Farahani, R.Z. and Dullaert, W. (2010) A Memetic Algorithm for Bi-Objective Integrated Forward/Reverse Logistics Network Design. Computers & Operations Research, 37, 1100-1112.
http://dx.doi.org/10.1016/j.cor.2009.09.018 [17] Wang, H.F. and Hsu, H.W. (2010) A Closed-Loop Logistic Model with a Spanning-Tree Based Genetic Algorithm. Computers & Operations Research, 37, 376-389.
http://dx.doi.org/10.1016/j.cor.2009.06.001 [18] Khajavi, L.T., Seyed-Hosseini, S.M. and Makui, A. (2011) An Integrated Forward/Reverse Logistics Network Optimization Model for Multi-Stage Capacitated Supply Chain. iBusiness, 3, 229-235.
http://dx.doi.org/10.4236/ib.2011.32030 [19] Liao, T.Y. and Rachmat, A. (2011) A Multi-Product Reverse Logistics Model for Third Party Logistics. International Conference on Modeling, Simulation and Control, IPCSIT, IACSIT Press, Singapore, 48-52. [20] Pishvaee, M.S., Rabbani, M. and Torabi, S.A. (2011) A Robust Optimization Approach to Closed-Loop Supply Chain Network Design under Uncertainty. Applied Mathematical Modelling, 35, 637-649.
http://dx.doi.org/10.1016/j.apm.2010.07.013 [21] Nandita, A. (2011) The Apparel Aftermarket in India—A Case Study Focusing on Reverse Logistics. Journal of Fashion Marketing and Management, 15, 211-227.
http://dx.doi.org/10.1108/13612021111132645 [22] Nenes, G. and Nikolaidis, Y. (2012) A Multi-Period Model for Managing Used Product Returns. International Journal of Production Research, 50, 1360-1376.
http://dx.doi.org/10.1080/00207543.2011.609650 [23] Ozkir, V. and Basligil, H. (2012) Modeling Product-Recovery Processes in Closed-Loop Supply-Chain Network Design. International Journal of Production Research, 50, 2218-2233.
http://dx.doi.org/10.1080/00207543.2011.575092 [24] Piplani, R. and Saraswat, A. (2012) Robust Optimization Approach to the Design of Service Networks for Reverse Logistics. International Journal of Production Research, 50, 1424-1437.
http://dx.doi.org/10.1080/00207543.2011.571942 [25] Vahdani, B., Mogaddham, R.T., Modarres, M. and Baboli, A. (2012) Reliable Design of a Forward/Reverse Logistics Network under Uncertainty: A Robust M/M/c Queuing Model. Transportation Research Part E, 48, 1152-1168.
http://dx.doi.org/10.1016/j.tre.2012.06.002 [26] Ramezani, M., Bashiri, M. and Moghaddam, R.T. (2013) A New Multi-Objective Stochastic Model for a Forward/Reverse Logistic Network Design with Responsiveness and Quality Level. Applied Mathematical Modelling, 37, 328-344. http://dx.doi.org/10.1016/j.apm.2012.02.032 [27] Rosa, V.D., Gebhard, M., Hartmann, E. and Wollenweber, J. (2013) Robust Sustainable Bi-Directional Logistics Network Design under Uncertainty. International Journal of Production Economics, 145, 184-198.
http://dx.doi.org/10.1016/j.ijpe.2013.04.033 [28] Subramanian, P., Ramkumar, N., Narendran, T.T. and Ganesh, K. (2013) PRISM: Priority Based Simulated Annealing for a Closed Loop Supply Chain Network Design Problem. Applied Soft Computing, 13, 1121-1135.
http://dx.doi.org/10.1016/j.asoc.2012.10.004 [29] Mahmoudi, H., Fazlollahtabar, H. and Mahdavi, I. (2013) Mathematical Modeling for Minimizing Costs in a Multilayer Multi-Product Reverse Supply Chain. Industrial Engineering & Management, 2, 1-6. [30] Eskandarpur, M., Zegordi, S.H. and Nikbakhsh, E. (2013) A Parallel Variable Neighborhood Search for the Multi-Objective Sustainable Post Sales Network Design Problem. International Journal of Production Economics, 145, 117-131. http://dx.doi.org/10.1016/j.ijpe.2012.10.013 [31] Hafeti, S.M. and Jolai, F. (2013) Robust and Reliable Forward-Reverse Logistics Network Design under Demand Uncertainty and Facility Disruptions. Applied Mathematical Modelling, 38, 2630-2647. [32] Keyvanshokooh, E., Fattahi, M., Hosseini, S.M.S. and Moghaddam, R.T. (2013) A Dynamic Pricing Approach for Returned Products in Integrated Forward/Reverse Logistics Network Design. Applied Mathematical Modelling, 37, 10182-10202.
http://dx.doi.org/10.1016/j.apm.2013.05.042 [33] Diabat, A., Kannan, D., Kaliyan, M. and Svetinovic, D. (2013) An Optimization Model for Product Returns Using Genetic Algorithms and Artificial Immune System. Resources, Conservation and Recycling, 74, 156-169.
http://dx.doi.org/10.1016/j.resconrec.2012.12.010 [34] Amin, S.H. and Zhang, G. (2013) A Multi-Objective Facility Location Model for Closed Loop Supply Chain Network under Uncertain Demand and Return. Applied Mathematical Modelling, 37, 4165-4176.
http://dx.doi.org/10.1016/j.apm.2012.09.039 [35] Cardoso, S.R., Paula, F.D.A., Povoa, B. and Relvas, S. (2013) Design and Planning of Supply Chains with Integration of Reverse Logistics Activities under Demand Uncertainty. European Journal of Operational Research, 226, 436-451.
http://dx.doi.org/10.1016/j.ejor.2012.11.035 [36] Devika, K., Jafarian, A. and Nourbakhash, V. (2014) Designing a Sustainable Closed-Loop Supply Chain Network Based on Triple Bottom Line Approach: A Comparison of Metaheuristics Hybridization Techniques. European Journal of Operational Research, 235, 594-615.
http://dx.doi.org/10.1016/j.ejor.2013.12.032
[1] Krikke, H., Ruwaardz, J.B. and Van Wassenhove, L.N. (2003) Concurrent Product and Closed-Loop Supply Chain Design with an Application to Refrigerators. International Journal of Production Research, 41, 3689-3719.
http://dx.doi.org/10.1080/0020754031000120087 [2] Schultmann, F., Zumkeller, M. and Rentz, O. (2006) Modeling Reverse Logistic Tasks within Closed-Loop Supply Chains: An Example from the Automotive Industry. European Journal of Operational Research, 171, 1033-1050.
http://dx.doi.org/10.1016/j.ejor.2005.01.016 [3] Salema, M.I.G., Povoa, A.P.B. and Novais, A.Q. (2007) An Optimization Model for the Design of a Capacitated Multi-Product Reverse Logistics Network with Uncertainty. European Journal of Operational Research, 179, 1063-1077.
http://dx.doi.org/10.1016/j.ejor.2005.05.032 [4] Staikos, T. and Rahimifard, S. (2007) A Decision-Making Model for Waste Management in the Footwear Industry. International Journal of Production Research, 45, 4403-4422.
http://dx.doi.org/10.1080/00207540701450187 [5] Ko, H.J. and Evans, G.W. (2007) A Genetic Algorithm-Based Heuristic for the Dynamic Integrated Forward/Reverse Logistics Network for 3PLs. Computers & Operations Research, 34, 346-366.
http://dx.doi.org/10.1016/j.cor.2005.03.004 [6] Lu, Z. and Bostel, N. (2007) A Facility Location Model for Logistics Systems Including Reverse Flows: The Case of Remanufacturing Activities. Computers & Operations Research, 34, 299-323.
http://dx.doi.org/10.1016/j.cor.2005.03.002 [7] Du, F. and Evans, G.W. (2008) A Bi-Objective Reverse Logistics Network Analysis for Post-Sale Service. Computers & Operations Research, 35, 2617-2634.
http://dx.doi.org/10.1016/j.cor.2006.12.020 [8] Lee, D.H. and Dong, M. (2008) A Heuristic Approach to Logistics Network Design for End-of-Lease Computer Products Recovery. Transportation Research Part E, 44, 455-474.
http://dx.doi.org/10.1016/j.tre.2006.11.003 [9] Lee, D.H. and Dong, M. (2009) Dynamic Network Design for Reverse Logistics Operations under Uncertainty. Transportation Research Part E, 45, 61-71.
http://dx.doi.org/10.1016/j.tre.2008.08.002 [10] Lin, L., Gen, M. and Wang, X. (2009) Integrated Multistage Logistics Network Design by Using Hybrid Evolutionary Algorithm. Computers & Industrial Engineering, 56, 854-873.
http://dx.doi.org/10.1016/j.cie.2008.09.037 [11] Mutha, A. and Pokharel, S. (2009) Strategic Network Design for Reverse Logistics and Remanufacturing Using New and Old Product Modules. Computers & Industrial Engineering, 56, 334-346.
http://dx.doi.org/10.1016/j.cie.2008.06.006 [12] Salema, M.I.G., Povoa, A.P.B. and Novais, A.Q. (2009) A Strategic and Tactical Model for Closed-Loop Supply Chains. OR Spectrum, 31, 573-599.
http://dx.doi.org/10.1007/s00291-008-0160-5 [13] Dahel, N.E. (2010) Modeling Supply Chain Network Design and Product Recovery Planning under Uncertainty. Northeast Decision Sciences Institute Proceedings, Virginia, 26-28 March 2010, 714-719. [14] Salema, M.I.G., Povoa, A.P.B. and Novais, A.Q. (2010) Simultaneous Design and Planning of Supply Chains with Reverse Flows: A Generic Modeling Framework. European Journal of Operational Research, 203, 336-349.
http://dx.doi.org/10.1016/j.ejor.2009.08.002 [15] El-Sayed, M., Afia, N. and El-Kharbotly, A. (2010) A Stochastic Model for Forward-Reverse Logistics Network Design under Risk. Computers & Industrial Engineering, 58, 423-431.
http://dx.doi.org/10.1016/j.cie.2008.09.040 [16] Pishvaee, M.S., Farahani, R.Z. and Dullaert, W. (2010) A Memetic Algorithm for Bi-Objective Integrated Forward/Reverse Logistics Network Design. Computers & Operations Research, 37, 1100-1112.
http://dx.doi.org/10.1016/j.cor.2009.09.018 [17] Wang, H.F. and Hsu, H.W. (2010) A Closed-Loop Logistic Model with a Spanning-Tree Based Genetic Algorithm. Computers & Operations Research, 37, 376-389.
http://dx.doi.org/10.1016/j.cor.2009.06.001 [18] Khajavi, L.T., Seyed-Hosseini, S.M. and Makui, A. (2011) An Integrated Forward/Reverse Logistics Network Optimization Model for Multi-Stage Capacitated Supply Chain. iBusiness, 3, 229-235.
http://dx.doi.org/10.4236/ib.2011.32030 [19] Liao, T.Y. and Rachmat, A. (2011) A Multi-Product Reverse Logistics Model for Third Party Logistics. International Conference on Modeling, Simulation and Control, IPCSIT, IACSIT Press, Singapore, 48-52. [20] Pishvaee, M.S., Rabbani, M. and Torabi, S.A. (2011) A Robust Optimization Approach to Closed-Loop Supply Chain Network Design under Uncertainty. Applied Mathematical Modelling, 35, 637-649.
http://dx.doi.org/10.1016/j.apm.2010.07.013 [21] Nandita, A. (2011) The Apparel Aftermarket in India—A Case Study Focusing on Reverse Logistics. Journal of Fashion Marketing and Management, 15, 211-227.
http://dx.doi.org/10.1108/13612021111132645 [22] Nenes, G. and Nikolaidis, Y. (2012) A Multi-Period Model for Managing Used Product Returns. International Journal of Production Research, 50, 1360-1376.
http://dx.doi.org/10.1080/00207543.2011.609650 [23] Ozkir, V. and Basligil, H. (2012) Modeling Product-Recovery Processes in Closed-Loop Supply-Chain Network Design. International Journal of Production Research, 50, 2218-2233.
http://dx.doi.org/10.1080/00207543.2011.575092 [24] Piplani, R. and Saraswat, A. (2012) Robust Optimization Approach to the Design of Service Networks for Reverse Logistics. International Journal of Production Research, 50, 1424-1437.
http://dx.doi.org/10.1080/00207543.2011.571942 [25] Vahdani, B., Mogaddham, R.T., Modarres, M. and Baboli, A. (2012) Reliable Design of a Forward/Reverse Logistics Network under Uncertainty: A Robust M/M/c Queuing Model. Transportation Research Part E, 48, 1152-1168.
http://dx.doi.org/10.1016/j.tre.2012.06.002 [26] Ramezani, M., Bashiri, M. and Moghaddam, R.T. (2013) A New Multi-Objective Stochastic Model for a Forward/Reverse Logistic Network Design with Responsiveness and Quality Level. Applied Mathematical Modelling, 37, 328-344. http://dx.doi.org/10.1016/j.apm.2012.02.032 [27] Rosa, V.D., Gebhard, M., Hartmann, E. and Wollenweber, J. (2013) Robust Sustainable Bi-Directional Logistics Network Design under Uncertainty. International Journal of Production Economics, 145, 184-198.
http://dx.doi.org/10.1016/j.ijpe.2013.04.033 [28] Subramanian, P., Ramkumar, N., Narendran, T.T. and Ganesh, K. (2013) PRISM: Priority Based Simulated Annealing for a Closed Loop Supply Chain Network Design Problem. Applied Soft Computing, 13, 1121-1135.
http://dx.doi.org/10.1016/j.asoc.2012.10.004 [29] Mahmoudi, H., Fazlollahtabar, H. and Mahdavi, I. (2013) Mathematical Modeling for Minimizing Costs in a Multilayer Multi-Product Reverse Supply Chain. Industrial Engineering & Management, 2, 1-6. [30] Eskandarpur, M., Zegordi, S.H. and Nikbakhsh, E. (2013) A Parallel Variable Neighborhood Search for the Multi-Objective Sustainable Post Sales Network Design Problem. International Journal of Production Economics, 145, 117-131. http://dx.doi.org/10.1016/j.ijpe.2012.10.013 [31] Hafeti, S.M. and Jolai, F. (2013) Robust and Reliable Forward-Reverse Logistics Network Design under Demand Uncertainty and Facility Disruptions. Applied Mathematical Modelling, 38, 2630-2647. [32] Keyvanshokooh, E., Fattahi, M., Hosseini, S.M.S. and Moghaddam, R.T. (2013) A Dynamic Pricing Approach for Returned Products in Integrated Forward/Reverse Logistics Network Design. Applied Mathematical Modelling, 37, 10182-10202.
http://dx.doi.org/10.1016/j.apm.2013.05.042 [33] Diabat, A., Kannan, D., Kaliyan, M. and Svetinovic, D. (2013) An Optimization Model for Product Returns Using Genetic Algorithms and Artificial Immune System. Resources, Conservation and Recycling, 74, 156-169.
http://dx.doi.org/10.1016/j.resconrec.2012.12.010 [34] Amin, S.H. and Zhang, G. (2013) A Multi-Objective Facility Location Model for Closed Loop Supply Chain Network under Uncertain Demand and Return. Applied Mathematical Modelling, 37, 4165-4176.
http://dx.doi.org/10.1016/j.apm.2012.09.039 [35] Cardoso, S.R., Paula, F.D.A., Povoa, B. and Relvas, S. (2013) Design and Planning of Supply Chains with Integration of Reverse Logistics Activities under Demand Uncertainty. European Journal of Operational Research, 226, 436-451.
http://dx.doi.org/10.1016/j.ejor.2012.11.035 [36] Devika, K., Jafarian, A. and Nourbakhash, V. (2014) Designing a Sustainable Closed-Loop Supply Chain Network Based on Triple Bottom Line Approach: A Comparison of Metaheuristics Hybridization Techniques. European Journal of Operational Research, 235, 594-615.
http://dx.doi.org/10.1016/j.ejor.2013.12.032