Title: Reliable forward-reverse logistics network design under partial and complete facility disruptions

Authors: Seyed Morteza Hatefi; Fariborz Jolai

Addresses: Faculty of Engineering, Shahrekord University, Rahbar Boulevard, P.O. Box 115, Shahrekord, Iran ' Department of Industrial Engineering, College of Engineering, University of Tehran, P.O. Box 11155/4563, N. Kargar St., Tehran, Iran

Abstract: Although disruption risks may occur with a low probability in a supply chain network, they have negative financial impacts and also the recovery process from their destructive effects is very slow. This paper proposes a reliability model for an integrated forward-reverse logistics network design, which can cope with both partial and complete facility disruptions. The reliability model is formulated as a stochastic robust programming whose objective function is to minimise the fixed opening costs of facilities and the expected cost of disruption scenarios, including processing costs, transportation costs, and penalty costs for non-satisfied demands. For doing so, a recent robust optimisation approach is modified to protect the concerned network against partial and complete capacity disruptions. Furthermore, a stochastic programming is employed to account for all interested scenarios. Three numerical experiments are designed to study the effect of capacity disruptions on the concerned logistic network. Finally, the results of the proposed model are compared with the conventional robust optimisation models.

Keywords: forward-reverse logistics networks; network design; robust optimisation; stochastic programming; disruption risks; reliability modelling; facility disruptions; supply chain networks; supply chain management; SCM; processing costs; transport costs; penalty costs.

DOI: 10.1504/IJLSM.2015.068426

International Journal of Logistics Systems and Management, 2015 Vol.20 No.3, pp.370 - 394

Received: 04 Oct 2013
Accepted: 08 Dec 2013
Published online: 15 Apr 2015 *

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