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A location-inventory-routing problem to design a circular closed-loop supply chain network with carbon tax policy for achieving circular economy: An augmented epsilon-constraint approach

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  • Govindan, Kannan
  • Salehian, Farhad
  • Kian, Hadi
  • Hosseini, Seyed Teimoor
  • Mina, Hassan

Abstract

The emergence of the circular economy concept has pushed industry owners towards the green supply chain and waste reduction. The closed-loop supply chain originates from the concept of the circular economy and its purpose is to increase efficiency and profitability by reducing waste and energy consumption. Hence, in this research, an integrated bi-objective mixed-integer linear programming model is developed with the aim of optimizing both operational and strategic decisions in a closed-loop supply chain network. The proposed model benefits the location-inventory-routing problem to structure the network, and it applies a carbon tax policy and vehicle scheduling problem to reduce emissions and vehicle waiting time, respectively. Considering problems such as split-delivery, storage possibility, shortage, supplier selection, order allocation, heterogenous vehicles, and uncertain demand has led to the development of a comprehensive model. A stochastic scenario-based approach is used to deal with demand uncertainty, and an augmented epsilon-constraint method is employed to solve the proposed bi-objective model. The applicability of the proposed model and the effectiveness of the bi-objective solution approach for achieving circular economy are examined through its implementation in a cable and wire industry in Iran.

Suggested Citation

  • Govindan, Kannan & Salehian, Farhad & Kian, Hadi & Hosseini, Seyed Teimoor & Mina, Hassan, 2023. "A location-inventory-routing problem to design a circular closed-loop supply chain network with carbon tax policy for achieving circular economy: An augmented epsilon-constraint approach," International Journal of Production Economics, Elsevier, vol. 257(C).
    • Handle: RePEc:eee:proeco:v:257:y:2023:i:c:s0925527323000038
    DOI: 10.1016/j.ijpe.2023.108771
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    References listed on IDEAS

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    1. Fahime Lotfian Delouyi & Meisam Ranjbari & Zahra Shams Esfandabadi, 2023. "A Hybrid Multi-Criteria Decision Analysis to Explore Barriers to the Circular Economy Implementation in the Food Supply Chain," Sustainability, MDPI, vol. 15(12), pages 1-23, June.
    2. Ren, Yu & Wu, Kuo-Jui & Lim, Ming K. & Tseng, Ming-Lang, 2023. "Technology transfer adoption to achieve a circular economy model under resource-based view: A high-tech firm," International Journal of Production Economics, Elsevier, vol. 264(C).
    3. Marlen Gabriele Arnold & Constanze Pfaff & Thomas Pfaff, 2023. "Circular Business Model Strategies Progressing Sustainability in the German Textile Manufacturing Industry," Sustainability, MDPI, vol. 15(5), pages 1-29, March.

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