An approach for reliable circular supplier selection and circular closed-loop supply chain network design focusing on the collaborative costs, shortage, and circular criteria

Faced with new supply chain challenges, modern companies collaborate with suppliers and consider backup suppliers and circular supplier selection criteria. To resolve this problem, a hybrid approach of DSM clustering and a multi-objective model is developed for the issue of reliable circular supplier selection and order allocation in a circular closed-loop supply chain. The approach considered collaborative costs, circular criteria, shortage, collaboration network reliability, order allocation, competencies, module assignment, capacity, and backup suppliers at the same time and specified the optimal configuration of modules at the early stages of product design. We modeled collaborative costs as a quadratic function. The model maximized suppliers' circularity, skill level, and network reliability. We used the augmented epsilon constraint method to validate the model. The model was evaluated through numerical experiments on real and artificial datasets. The approach was applied to the electro-optical camera. With the implementation of the approach on the artificial network (15 suppliers), the optimal number of modules was equal to four, and the main suppliers = [1, 2, 3, 4, 9, 15], backup suppliers = [3, 4, 8], and optimal orders = [6, 2, 1, 1, 1, 3] were obtained. When it came to the electro-optical camera (10 suppliers), six modules were computed according to experts’ opinions; the main suppliers = [1, 2, 3, 8, 9, 10] and the backup supplier = [4] were achieved. The results demonstrate the applicability and efficiency of the approach and effectively design a main and backup reliable circular supplier network with efficient costs, optimal modules, and backup suppliers. It is suggested that the approach be applied to other products and metaheuristic algorithms be employed to solve large-scale problems.