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Closed-loop supply chain network design under uncertain quality status: Case of durable products

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  • Jeihoonian, Mohammad
  • Kazemi Zanjani, Masoumeh
  • Gendreau, Michel

Abstract

This paper proposes a two-stage stochastic mixed-integer programming model for a closed-loop supply chain network design problem in the context of modular structured products in which the reverse network entails several types of recovery options. It accounts for uncertainty in the quality status of the return stream, modeled as binary scenarios for each component in the reverse bill of material corresponding to such products. To deal with the intractable number of scenarios in the proposed model, a scenario reduction scheme is adapted to the problem of interest to preserve the most pertinent scenarios based on a modified Euclidean distance measure. The reduced stochastic large-scale optimization problem is then solved via a L-shaped algorithm enhanced with surrogate constraints and Pareto-optimal cuts. Numerical results indicate that the scenario reduction algorithm provides good quality solutions to the stochastic problem in a reasonable amount of time through applying the enhanced L-shaped method.

Suggested Citation

  • Jeihoonian, Mohammad & Kazemi Zanjani, Masoumeh & Gendreau, Michel, 2017. "Closed-loop supply chain network design under uncertain quality status: Case of durable products," International Journal of Production Economics, Elsevier, vol. 183(PB), pages 470-486.
  • Handle: RePEc:eee:proeco:v:183:y:2017:i:pb:p:470-486
    DOI: 10.1016/j.ijpe.2016.07.023
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    Cited by:

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    2. Van Engeland, Jens & Beliën, Jeroen & De Boeck, Liesje & De Jaeger, Simon, 2020. "Literature review: Strategic network optimization models in waste reverse supply chains," Omega, Elsevier, vol. 91(C).
    3. Chen, Wenyi & Kucukyazici, Beste & Saenz, Maria Jesus, 2019. "On the joint dynamics of the economic and environmental performances for collective take-back systems," International Journal of Production Economics, Elsevier, vol. 218(C), pages 228-244.
    4. Mohebalizadehgashti, Fatemeh & Zolfagharinia, Hossein & Amin, Saman Hassanzadeh, 2020. "Designing a green meat supply chain network: A multi-objective approach," International Journal of Production Economics, Elsevier, vol. 219(C), pages 312-327.
    5. Saedinia, R. & Vahdani, Behnam & Etebari, F. & Afshar Nadjafi, B., 2019. "Robust gasoline closed loop supply chain design with redistricting, service sharing and intra-district service transfer," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 123(C), pages 121-141.
    6. S. Malolan & M. Mathirajan & M. K. Tiwari, 2020. "A methodology for determining the optimal reverse flow capacities and the breakeven period for a multi products-component remanufacturing problem of an OEM," Operations Management Research, Springer, vol. 13(3), pages 233-248, December.
    7. Chen, Jen-Ming & Hsu, Yu-Ting, 2017. "Revenue management for durable goods using trade-ins with certified pre-owned options," International Journal of Production Economics, Elsevier, vol. 186(C), pages 55-70.
    8. Pazoki, Mostafa & Samarghandi, Hamed, 2020. "Take-back regulation: Remanufacturing or Eco-design?," International Journal of Production Economics, Elsevier, vol. 227(C).
    9. Quariguasi Frota Neto, João & Dutordoir, Marie, 2020. "Mapping the market for remanufacturing: An application of “Big Data” analytics," International Journal of Production Economics, Elsevier, vol. 230(C).
    10. Diabat, Ali & Jebali, Aida, 2021. "Multi-product and multi-period closed loop supply chain network design under take-back legislation," International Journal of Production Economics, Elsevier, vol. 231(C).

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