A NOVEL BI-OBJECTIVE MODEL FOR A MULTI-PERIOD MULTI-PRODUCT CLOSED-LOOP SUPPLY CHAIN

Abstract

Closed-loop supply chain (CLSC) is a kind of supply chain which contains forward and backward flows of commodities within a logistics network. In the decision-making process of CLSC, locational, inventory control and transportation issues are addressed to deal with strategic, tactical and operational decisions. This paper utilizes a novel bi-objective mixed-integer linear programming (MILP) model to formulate a multi-period multi-product CLSC design problem considering aggregate cost minimization and service level maximization at the same time. To tackle the bi-objectiveness of the model, goal attainment method (GAM) is applied which is then executed by Gurobi Python API to test the applicability of the suggested model for three different scales (small, medium and large). It is demonstrated that the proposed methodology can find the optimal solutions for different problems in a maximum of 500 seconds. Finally, a set of sensitivity analyses is carried out on the main parameters in order to test the behaviors of the objective functions and suggest managerial insights as well as decision aids. The results reveal that the model is highly dependent on the demand parameter, that is, an increase in demand is closely related to an increase in the aggregate cost and a simultaneous downward trend in the service level.