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A bi-objective model for designing a green closed-loop supply chain network in a petroleum complex considering transportation constraints: a case study

Author

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  • Fatemeh Vardan

    (Shahrood University of Technology)

  • Seyed Mohammad Hassan Hosseini

    (Shahrood University of Technology)

Abstract

Environmental concerns and operational costs leave companies no choice but to apply the approach of supply chain management considering both environmental and cost aspects. Meanwhile, the petroleum industry as a main industry plays a vital role in Iran’s economy as well as CO2 emissions. This paper aims to propose a bi-objective mixed integer linear programming model for a closed-loop supply chain network design in an Iranian petroleum complex. We consider a four-echelon supply chain network including input feed suppliers, primary petroleum manufacturers, secondary petroleum manufacturers, and customers. In addition, collection and recycling centres are also considered for products that have reached the end of their life. To close the problem to real-world conditions, we consider different technologies and different types of capacity for candidate petrochemical complexes and different types of vehicles for transportation. All types of vehicles have a given capacity and differ in terms of cost and CO2 emissions. Two objective functions are considered for simultaneous optimization, which include total expected cost and total CO2 emissions. The model's efficiency is validated based on data from a real case in the production and distribution chain of a petroleum complex in Iran. The result represents the conflict between the two objective functions and the proposed model provided several options as Pareto solutions for decision makers. Moreover, sensitivity analysis represents the effect of variations in the capacity of domestic refineries, the capacity of vehicles, and the capacity of secondary petrochemical complexes on two objective functions and the final values of decision variables. Specifically, we find that changes in the capacity of refineries, causes a 12% change in the value of the emitted CO2 but the total expected cost doesn’t change significantly. Finally, managerial insights are gained through the numerical results.

Suggested Citation

  • Fatemeh Vardan & Seyed Mohammad Hassan Hosseini, 2025. "A bi-objective model for designing a green closed-loop supply chain network in a petroleum complex considering transportation constraints: a case study," International Journal of System Assurance Engineering and Management, Springer;The Society for Reliability, Engineering Quality and Operations Management (SREQOM),India, and Division of Operation and Maintenance, Lulea University of Technology, Sweden, vol. 16(3), pages 1020-1039, March.
    • Handle: RePEc:spr:ijsaem:v:16:y:2025:i:3:d:10.1007_s13198-025-02730-7
    DOI: 10.1007/s13198-025-02730-7
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