A robust optimization model for sustainable and resilient closed-loop supply chain network design considering conditional value at risk

Date

2021-06-01

Author

Lotfi, Reza
Mehrjerdi, Yahia Zare
Pishvaee, Mir Saman
Sadeghieh, Ahmad
Weber, Gerhard Wilhelm

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One of the challenges facing supply chain designers is designing a sustainable and resilient supply chain network. The present study considers a closed-loop supply chain by taking into account sustainability, resilience, robustness, and risk aversion for the first time. The study suggests a two-stage mixed-integer linear programming model for the problem. Further, the robust counterpart model is used to handle uncertainties. Furthermore, conditional value at risk criterion in the model is considered in order to create real-life conditions. The sustainability goals addressed in the present study include minimizing the costs, CO2 emission, and energy, along with maximizing employment. In addition, effective environmental and social life-cycle evaluations are provided to assess the associated effects of the model on society, environment, and energy consumption. The model aims to answer the questions regarding the establishment of facilities and amount of transported goods between facilities. The model is implemented in a car assembler company in Iran. Based on the results, several managerial insights are offered to the decision-makers. Due to the complexity of the problem, a constraint relaxation is applied to produce quality upper and lower bounds in medium and large-scale models. Moreover, the LP-Metric method is used to merge the objectives to attain an optimal solution. The results revealed that the robust counterpart provides a better estimation of the total cost, pollution, energy consumption, and employment level compared to the basic model.

Subject Keywords

Closed-loop supply chain, Sustainability, Resilience, Robust optimization, Risk

URI

https://hdl.handle.net/11511/89470

Journal

NUMERICAL ALGEBRA CONTROL AND OPTIMIZATION

DOI

https://doi.org/10.3934/naco.2020023

Collections

Graduate School of Applied Mathematics, Article

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Citation Formats

R. Lotfi, Y. Z. Mehrjerdi, M. S. Pishvaee, A. Sadeghieh, and G. W. Weber, “A robust optimization model for sustainable and resilient closed-loop supply chain network design considering conditional value at risk,” NUMERICAL ALGEBRA CONTROL AND OPTIMIZATION, pp. 221–253, 2021, Accessed: 00, 2021. [Online]. Available: https://hdl.handle.net/11511/89470.