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Benders’ decomposition for concurrent redesign of forward and closed-loop supply chain network with demand and return uncertainties

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  • Khatami, Maryam
  • Mahootchi, Masoud
  • Farahani, Reza Zanjirani

Abstract

This paper attempts to design a reverse supply chain network (SCN), add it to an existing multi-product forward SCN and simultaneously redesign the existing forward supply chain (SC). The problem considers uncertainty on products demand and and also returned products in multi-period context. Benders’ decomposition is applied to solve the stochastic mixed-integer model to optimality. The scenarios are generated based on the demand distribution function using Cholesky’s factorization method to consider correlation among different products’ demands. To decrease the computational effort, the number of scenarios is reduced using k-means clustering algorithm. The method is tested on a cell phone SC.

Suggested Citation

  • Khatami, Maryam & Mahootchi, Masoud & Farahani, Reza Zanjirani, 2015. "Benders’ decomposition for concurrent redesign of forward and closed-loop supply chain network with demand and return uncertainties," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 79(C), pages 1-21.
    • Handle: RePEc:eee:transe:v:79:y:2015:i:c:p:1-21
    DOI: 10.1016/j.tre.2015.03.003
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