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Incorporating Price-Dependent Demands into a Multi-Echelon Closed-Loop Network Considering the Lost Sales and Backorders: a Case Study of Wireless Network

Author

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  • Behnam Vahdani

    (Qazvin Branch, Islamic Azad University
    IMT Atlantique, Lab-STICC)

  • Elham Ahmadzadeh

    (Qazvin Branch, Islamic Azad University)

Abstract

This study renders a location-inventory problem for a closed-loop supply chain network under the circumstance of price-dependent demands, in which there are suppliers/recovering centers, stores and consumer areas. In this respect, the demand is supposed to be correlated, and the inventory of new and returned products are controlled via a continuous review system (Q, r) in the stores. What is more, the shortage is allowed and could be emerged as back-ordered and lost sales. A nonlinear programming model is offered to formulate the problem, which maximizes the total profit of the supply chain. In this regard, miscellaneous decisions are determined, such as location-allocation facilities, inventory levels and prices of products. So as to solve the proposed model, two well-known meta-heuristic algorithms with particular encoding and decoding procedures, including a genetic algorithm (GA) and an imperialist competitive algorithm (ICA), are employed due to the Np-hard nature of the model. Finally, with the intention of illustrating the validation and applicability of the model, a real case study of a wireless network is investigated.

Suggested Citation

  • Behnam Vahdani & Elham Ahmadzadeh, 2021. "Incorporating Price-Dependent Demands into a Multi-Echelon Closed-Loop Network Considering the Lost Sales and Backorders: a Case Study of Wireless Network," Networks and Spatial Economics, Springer, vol. 21(3), pages 639-680, September.
    • Handle: RePEc:kap:netspa:v:21:y:2021:i:3:d:10.1007_s11067-021-09549-2
    DOI: 10.1007/s11067-021-09549-2
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    3. Jahani, Hamed & Abbasi, Babak & Sheu, Jiuh-Biing & Klibi, Walid, 2024. "Supply chain network design with financial considerations: A comprehensive review," European Journal of Operational Research, Elsevier, vol. 312(3), pages 799-839.

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