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A stochastic programming approach for designing supply loops

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  • Chouinard, Marc
  • D'Amours, Sophie
  • Aït-Kadi, Daoud

Abstract

A stochastic programming model for designing logistics networks integrating reverse logistics into current supply chains is proposed in this paper. It aims at evaluating impacts of randomness related to recovery, processing and demand volumes on the design decisions. These decisions deal with the location of service and processing centres and warehouses, regarding processed products with reuse potential, the definition of mission of sites and, consequently, the product accessibility. Flows of recovered products may be directed toward one or a number of processing alternatives, according to the different states of the recovered products as well as to the network conditions, which relate to recovery and demand volumes with respect to capacity constraints and operating costs. Notably, recovered products may be repaired, disassembled for part refurbishing or disposed. Such products are indicated here as valorized products and represent an economical supply alternative, which meets lower quality standards in comparison with new products. Portions of needs fulfilled by valorized products are defined according to the requirements of end-users, as well as management policies and strategies. The model aims at improving valorized product accessibility, while reducing the total operating costs of such a network. A heuristics based on the sample average approximation, involving the Monte Carlo sampling methods, is proposed to solve the problem.

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  • Chouinard, Marc & D'Amours, Sophie & Aït-Kadi, Daoud, 2008. "A stochastic programming approach for designing supply loops," International Journal of Production Economics, Elsevier, vol. 113(2), pages 657-677, June.
    • Handle: RePEc:eee:proeco:v:113:y:2008:i:2:p:657-677
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    2. Aydin, Nezir & Murat, Alper, 2013. "A swarm intelligence based sample average approximation algorithm for the capacitated reliable facility location problem," International Journal of Production Economics, Elsevier, vol. 145(1), pages 173-183.
    3. Vahab Vahdat & Mohammad Ali Vahdatzad, 2017. "Accelerated Benders’ Decomposition for Integrated Forward/Reverse Logistics Network Design under Uncertainty," Logistics, MDPI, vol. 1(2), pages 1-21, December.
    4. Govindan, Kannan & Soleimani, Hamed & Kannan, Devika, 2015. "Reverse logistics and closed-loop supply chain: A comprehensive review to explore the future," European Journal of Operational Research, Elsevier, vol. 240(3), pages 603-626.
    5. Xin Zhang & Gang Zhao & Yingxiu Qi & Botang Li, 2019. "A Robust Fuzzy Optimization Model for Closed-Loop Supply Chain Networks Considering Sustainability," Sustainability, MDPI, vol. 11(20), pages 1-24, October.
    6. Khatami, Maryam & Mahootchi, Masoud & Farahani, Reza Zanjirani, 2015. "Benders’ decomposition for concurrent redesign of forward and closed-loop supply chain network with demand and return uncertainties," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 79(C), pages 1-21.
    7. Ayvaz, Berk & Bolat, Bersam & Aydın, Nezir, 2015. "Stochastic reverse logistics network design for waste of electrical and electronic equipment," Resources, Conservation & Recycling, Elsevier, vol. 104(PB), pages 391-404.
    8. Jahani, Hamed & Abbasi, Babak & Sheu, Jiuh-Biing & Klibi, Walid, 2024. "Supply chain network design with financial considerations: A comprehensive review," European Journal of Operational Research, Elsevier, vol. 312(3), pages 799-839.
    9. Mohammad Fattahi & Kannan Govindan, 2017. "Integrated forward/reverse logistics network design under uncertainty with pricing for collection of used products," Annals of Operations Research, Springer, vol. 253(1), pages 193-225, June.
    10. Komoto, H. & Tomiyama, T. & Silvester, S. & Brezet, H., 2011. "Analyzing supply chain robustness for OEMs from a life cycle perspective using life cycle simulation," International Journal of Production Economics, Elsevier, vol. 134(2), pages 447-457, December.
    11. Yongbo Li & Devika Kannan & P. C. Jha & Kiran Garg & Jyoti Darbari & Neha Agarwal, 2023. "Design of a multi echelon product recovery embeded reverse logistics network for multi products and multi periods," Annals of Operations Research, Springer, vol. 323(1), pages 131-152, April.
    12. Das, Kanchan & Chowdhury, Abdul H., 2012. "Designing a reverse logistics network for optimal collection, recovery and quality-based product-mix planning," International Journal of Production Economics, Elsevier, vol. 135(1), pages 209-221.
    13. Baptista, Susana & Barbosa-Póvoa, Ana Paula & Escudero, Laureano F. & Gomes, Maria Isabel & Pizarro, Celeste, 2019. "On risk management of a two-stage stochastic mixed 0–1 model for the closed-loop supply chain design problem," European Journal of Operational Research, Elsevier, vol. 274(1), pages 91-107.
    14. Rastogi, Aditya P. & Fowler, John W. & Matthew Carlyle, W. & Araz, Ozgur M. & Maltz, Arnold & Büke, Burak, 2011. "Supply network capacity planning for semiconductor manufacturing with uncertain demand and correlation in demand considerations," International Journal of Production Economics, Elsevier, vol. 134(2), pages 322-332, December.

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