A robust optimization approach to closed-loop supply chain network design under uncertainty.pdfVIP

Applied Mathematical Modelling 35 2011 637–649 Contents lists available at ScienceDirect Applied Mathematical Modelling journal home A robust optimization approach to closed-loop supply chain network design under uncertainty Mir Saman Pishvaee, Masoud Rabbani *, Seyed Ali Torabi Department of Industrial Engineering, College of Engineering, University of Tehran, Tehran, Iran a r t i c l e i n f o a b s t r a c t Article history: The concern about signi?cant changes in the business environment such as customer Received 3 March 2009 demands and transportation costs has spurred an interest in designing scalable and robust Received in revised form 3 July 2010 supply chains. This paper proposes a robust optimization model for handling the inherent Accepted 7 July 2010 uncertainty of input data in a closed-loop supply chain network design problem. First, a Available online 13 July 2010 deterministic mixed-integer linear programming model is developed for designing a closed-loop supply chain network. Then, the robust counterpart of the proposed mixed- Keywords: integer linear programming model is presented by using the recent extensions in robust Closed-loop supply chain network optimization theory. Finally, to assess the robustness of the solutions obtained by the novel Reverse logistics Robust optimization robust optimization model, they are compared to those generated by the deterministic mixed-integer linear programming model in a number of realizations under different test problems. 2010 Elsevier Inc. All rights reserved. 1. Introduction An effective, ef?cient and robust supply chain is a sustainable competitive advantage for countries and ?rms and helps them to cope with increasing environmental turbulences and more intense competitive pressures. A supply chain is a net- work of supplier, production, distribution centers and channels between them organized to acquire raw material