Facility disruptions in a closed-loop supply chain featuring warranty policy and quality-based segmentation of returns

Document Type : Article

Authors

Department of Industrial Engineering, College of Engineering, Shahed University, Tehran, 3319118651, Iran

Abstract

This paper focuses on a closed-loop supply chain that deals with disruptions in the distribution centers, and optimizes the network in two dimensions of sustainability: economic and environmental. Economically, the proposed network maximizes the profits of the customers, manufacturers and distributors. Three avenues for cost minimization are designed for the customer by adding the warranty periods, the reworking options, and the incentives for returning the used items. Non-dominated solutions via the Reservation Level-driven Tchebycheff procedure are found by appropriate choice of facility establishment and suitable allocation links considering the disruption in the distribution centers.Environmentally, the model adopts a zero-waste strategy by embedding various return-segmentation policies and a secondary chain. The backward flow depends on the customers' choice of reworking, the validity of the warranty contract, and the quality of the returns. The test results indicate that due to various revenue options, the manufacturing and distribution centers prefer returns with medium-range quality, while due to the incentives offered for the recyclable items, the customers benefit the most from returning the items with the lowest quality. The tests on the probability of disruptions indicate that establishing a minimum number of the manufacturing and/or distribution sites without disruption leads to better overall performance.

Keywords


References:
1. Tordecilla, R.D., Juana, A.A., Montoya-Torres, J.R., et al. "Simulation-optimization methods for designing and assessing resilient supply chain networks under uncertainty scenarios: A Review", Simulation Modelling Practice and Theory, 106 (2021). DOI: 10.1016/j.simpat.2020.102166.
2. Chowdhury, M.M.H. and Quaddus, M.A. "Supply chain sustainability practices and governance for mitigating sustainability risk and improving market performance: A dynamic capability perspective", Journal of Cleaner Production, 278 (2021). DOI: 10.1016/j.jclepro.2020.123521.
3. Tolooie, A., Maity, M., and Sinha, A.K. "A two-stage stochastic mixed-integer program for reliable supply chain network design under uncertain disruptions and demand", Computers and Industrial Engineering, 148 (2020). DOI: 10.1016/j.cie.2020.106722.
4. Govindan, K. and Soleimani, H. "A review of reverse logistics and closed-loop supply chains: a journal of cleaner production fFocus", Journal of Cleaner Production, 142(1), pp. 371-384 (2017).
5. Bazan, E., Jaber, M.Y., and Zanoni, S. "Carbon emissions and energy effects on a two-level manufacturerretailer closed-loop supply chain model with remanufacturing subject to different coordination mechanisms", International Journal of Production Economics, 183(Part B), pp. 394-408 (2017).
6. Maiti, T. and Giri, B.C. "Two-way product recovery in a closed-loop supply chain with variable markup under price and quality dependent demand", International Journal of Production Economics, 183(Part B), pp. 259-272 (2017).
7. Xu, Z., Pokharel, S., Elomri, A., et al. "Emission policies and their analysis for the design of hybrid and dedicated closed-loop supply chains", Journal of Cleaner Production, 142(Part 4), pp. 4152-4168 (2017).
8. Masoudipour, E., Amirian, H., and Sahraeian, R. "A novel closed-loop supply chain based on the quality of returned products", Journal of Cleaner Production, 151(1), pp. 344-355 (2017).
9. Zhen, L., Huang, L., and Wang, W. "Green and sustainable closed-loop supply chain network design under uncertainty", Journal of Cleaner Production, 227(1), pp. 1195-1209 (2019).
10. Yi, P., Huang, M., Guo, L., et al. "A retailer oriented closed-loop supply chain network design for end-of-life construction machinery remanufacturing", Journal of Cleaner Production, 124(1), pp. 191-203 (2016).
11. Ahmadzadeh, E. and Vahdani, B. "A locationinventory- pricing model in a closed loop supply chain network with correlated demands and shortages under a periodic review system", Computers and Chemical Engineering, 101(1), pp. 148-166 (2017).
12. Mirmohammadi, S.H. and Sahraeian, R. "A novel sustainable closed-loop supply chain network design by considering routing and quality of products", International Journal of Engineering-Transactions B: Applications, 31(11), pp. 1918-1928 (2018).
13. Yu, H. and Solvang, W.D. "A fuzzy-stochastic multiobjective model for sustainable planning of a closedloop supply chain considering mixed uncertainty and network  flexibility", Journal of Cleaner Production, 266 (2020). DOI: 10.1016/j.jclepro.2020.121702.
14. Govindan, K., Mina, H., Esmaeili, A., et al. "An integrated hybrid approach for circular supplier selection and closed loop supply chain network design under uncertainty", Journal of Cleaner Production, 242 (2020). DOI: 10.1016/j.jclepro.2019.118317.
15. Ghomi-Avili, M., Jalali Naeini, S.G., Tavakkoli- Moghaddam, R., et al. "A fuzzy pricing model for a green competitive closed-loop supply chain network design in the presence of disruptions", Journal of Cleaner Production, 188(1), pp. 425-442 (2018).
16. Diabat, A., Jabbarzadeh, A., and Khosrojerdi, A. "A perishable product supply chain network design problem with reliability and disruption considerations", International Journal of Production Economics, 212(1), pp. 125-138 (2018).
17. Huang, H., He, Y., and Li, D. "Pricing and inventory decisions in the food supply chain with production disruption and controllable deterioration", Journal of Cleaner Production, 180(1), pp. 280-296 (2018).
18. Tong, L., Yang, K., and Xu, W.J. "Optimal strategies for CLSC considering supply disruption and carbon tax", Mathematical Problems in Engineering, 2020 (2020). DOI: 10.1155/2020/9808370.
19. Darom, N.A., Hishamuddin, H., Ramli, R., et al. "An inventory model of supply chain disruption recovery with safety stock and carbon emission consideration", Journal of Cleaner Production, 197(1), pp. 1011-1021 (2018).
20. Shen, J. "An uncertain sustainable supply chain network", Applied Mathematics and Computation, 378 (2020). DOI: 10.1016/j.amc.2020.125213.
21. Mohammadi, M. "Designing an integrated reliable model for stochastic lot-sizing and scheduling problem in hazardous materials supply chain under disruption and demand uncertainty", Journal of Cleaner Production (2020). DOI: 10.1016/j.jclepro.2020.122621.
22. Moshtagh, M.S. and Taleizadeh, A.A. "Stochastic integrated manufacturing and remanufacturing model with shortage, rework and quality-based return rate in a closed loop supply chain", Journal of Cleaner Production, 141(1), pp. 1548-1573 (2017).
23. Chen, D.S., Batson, R.G., and Dang, Y., Applied Integer Programming: Modeling and Solution, First Ed., Wiley (2010).
24. Demirtas, E.A. and Ustun,  O. "An integrated multiobjective decision making process for supplier selection and order allocation", Omega, 26(1), pp. 76-90 (2008).
25. Steuer, R.E. and Choo, E.U. "An interactive weighted Tchebycheff procedure for multiple objective programming", Mathematical Programming, 26(3), pp. 326- 344 (1983).
26. Reeves, G.R. and MacLeod, K.R. "Some experiments in Tchebycheff-based approaches for interactive multiple objective decision making", Computers and Operations Research, 26(1), pp.  1311-1321 (1999).
27. Berube, J., Gendreau, M., and Potvin, J. "An exact"-constraint method for bi-objective combinatorial optimization problems: Application to the traveling salesman problem with profits", European Journal of Operational Research, 194(1), pp. 39-50 (2009).
28. Amirian, H. and Sahraeian, R. "Augmented "- constraint method in multi-objective  flowshop problem with past sequence set-up times and a modified learning effect", International Journal of Production Research, 53(1), pp. 5962-5976 (2015).