Exploring the opportunities in establishing a closed-loop supply chain under uncertainty

Reverse supply chains (RSC) may provide the benefits of reducing pollution, creating new jobs, and generating income from the recyclable materials. However, their implementation comes with risks and hardly predictable outcomes. The model presented in this paper aims to help managers to better evaluate risks and opportunities while deciding on the RSC design to manage the reverse flow of end-of-life (EOL) products in an existing supply chain. The goal is to set up the disassembly and recovery facilities and organize the flows between them while maximizing total network profit. We propose a two-stage multi-period mixed-integer program where the budget available for decisions at each period depends on the outcomes of previous periods. The demand for EOL products, the quantity of products returned and the time required to reprocess these products are considered uncertain. To incorporate this uncertainty into the decision making process, a discrete set of scenarios is defined. To take into account the decision maker's behavior in the areas of risks and opportunities, we propose to use $R_*$R∗ criterion to select the final solution. To demonstrate the relevance of $R_*$R∗ criterion, we conduct numerical investigations on an adapted case study from the literature and do a comparison with classic well-known criteria.