Authors: Aida Nazari Gooran; Hamed Rafiei; Masoud Rabbani
Addresses: Department of Industrial Engineering, College of Farabi, University of Tehran, Iran ' Department of Industrial Engineering, College of Farabi, University of Tehran, Iran ' School of Industrial and Systems Engineering, College of Engineering, University of Tehran, Iran
Abstract: Designing appropriate supply chain would provide numerous valuable feedbacks for the whole chain, since using returned products instead of reproducing them, is a more appropriate response to the environmental concerns on the one hand which provides benefit and financial savings for the chains on the other hand. Therefore, this paper presents a three-objective function mathematical model to maximise financial savings and quantities of returned products to the chain and minimise total costs in terms of uncertainty and risk that derives from reverse logistics nature. Finally, the developed model was solved by Monte Carlo simulation and genetic algorithm along with proper risk measures for risk-neutral and risk-seeking decision makers. The results indicated financial savings are one of the best objective functions in order to show superiority of reverse logistics network. As another result, it was pointed out that profitability of the chain increases because of delivering return products before their scrap-life.
Keywords: expected value; standard deviation; risk-neutral decision makers; risk-seeking decision makers; reverse logistics; uncertainty; risk; risk measures; genetic algorithms; Monte Carlo simulation.
International Journal of Operational Research, 2020 Vol.39 No.1, pp.24 - 49
Received: 14 Feb 2017
Accepted: 20 Nov 2017
Published online: 28 Apr 2020 *