A MULTI-OBJECTIVE MODEL FOR DECISION MAKING IN A CLOSED-LOOP SUPPLY CHAIN NETWORK

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1 A MULTI-OBJECTIVE MODEL FOR DECISION MAKING IN A CLOSED-LOOP SUPPLY CHAIN NETWORK Rashed Sahraeia Idusria Egieerig Depare, Shahed Uiversiy Khai Fars Highway, Shahed Uiversiy, Tehra, Ira E-ai: sahraeia@shahed.ac.ir Aireza Faah Tafi Idusria Egieerig Depare, Shahed Uiversiy Khai Fars Highway, Shahed Uiversiy, Tehra, Ira E-ai: azfaah@shahed.ac.ir Absrac Due o he icreased eviroea cocer ad aso aai copeiive advaages, cosed-oop suppy chai ewor desig has spurred a ieres hroughou he wo as decades aog researchers. I addiio, suppier seecio ad cosiderig iporace vaue of cusoers are of basis issues, which srogy affec o he suppy chai perforace. I his sudy, we propose a cosed-oop suppy chai ewor ha icorporaes he ewor desig decisios i boh forward ad reverse suppy chai ewors as we as assiiaes sraegic ad acica decisios. The ewor is cosidered for he producio of oe produc hrough a asseby of ui odues suppied by differe suppiers ad usage rae. To sove he proposed ode, we use STEP ehod as a ieracive approach which reveas he effec o he ewor souio due o chages i DM s prefereces o various obecives. Key Words: Cosed-oop Suppy Chai Newor Desig, Suppier seecio, STEP ehod JEL Cassificaio: M Busiess ad Maagee 1. INTRODUCTION I rece years, he iesiy of copeiio i he are, ead copaies o focus o he suppy chai ad iegraed ogisics. The desig of a cosed-oop suppy chai ewor (CSCN), icudig boh forward ad reverse fows, has araced paricuar aeio aog researches because of is beeficia busiess 309

2 facors. Cofiguraio of suppy chai ewors, icudig desig for srucura, iforaioa ad orgaizaioa syses, is oe of he os ipora sraegic decisios. Usuay, he suppy chai ewor desig i boh forward ad reverse fows addresses he uber of faciiies, heir ocaio ad capaciies ad he quaiy of fow bewee he (Feischa e a,2004). I ay cases, ogisics ewors are oy desiged for forward ogisics aciviies wihou cosiderig he reverse fow of reur producs. The cofiguraio of boh forward ad reverse SCN, however, has a iese effec o he perforace of each oher ad aso avoid he sub-opia resued fro separaed desig (Pishvaee e a,2009:28). I addiio, suppier seecio is a criica issue cocered i he process of aagig goba suppy chais (Viodh e a,2011:38). I ca resu i beer ad ore efficie services/producs ad oay ca ifuece he SCN. If a process is doe correcy, a higher quaiy ad oger asig reaioship are ore aaiabe. May papers have cosidered suppier seecio as a ipora uipe crieria decisio aig (MCDM) probe i suppy chai aagee. The aayica hierarchy process (AHP) ehod iroduced by Saay (1980) has ay appicaios i he suppier seecio process ad ay researchers (Koagu e a,2008:33) uiized he AHP wih a ui-obecive prograig for sovig suppier seecio probe. Based o aforeeioed cosideraios, his paper proposes a ui-obecive ode for a cosed-oop suppy chai ewor desig. The aor issues of he ode are as foows: (1) I syhesizes ui-obecive decisio aig (MODM) ad ui-aribue decisio aig (MADM) siuaeousy ad ieracivey o obai DM s prefereces by he differe coproise souios proposed, (2) iegraes he ewor desig decisios i boh forward ad reverse suppy chai ewors as we as icorporae he acica decisios (e.g., aeria fows ad vehice ype) wih sraegic oes (e.g., faciiy ocaio) a each period, o aver sub-opiaiy resuig fro separaed desig, (3) cosiders producio of oe produc hrough a asseby of various copoes suppied by various suppiers ad differe usage rae ad (5) weigh vaue of cusoer zoes. 2. PROBLEM DEFINITION The cosed-oop suppy chai cosidered i his paper is a ui-sage ewor, coaiig assebe, disribuio, cusoer zoe, coecio, recovery ad disposa ceers which iegraes he ewor desig decisios i boh forward ad reverse fows. As iusraed i Fig.1, he raw aerias ad copoes are 310

3 shipped o he pa i forward fows. The, fia producs assebed by pa are pacaged ad shipped o disribuio ceers. I rea word siuaios, cusoer zoes ay have differe iporace vaues, ad hose wih higher iporace, shoud be saisfied sooer. Thus, deads a he cusoer zoes are e hrough various disribuio ceers ad vehices by cosiderig heir prefereces. I he reverse side, he reured producs i he firs pace are coeced i coecio ceers. Afer quaiy esig ad disasseby aciviies, he recoverabe producs are shipped o recovery faciiies ad scraped producs are shipped o recycig ceers. The recovered producs are isered i he forward suppy chai ewor ad redisribued o he cusoer zoes. Suppy chai ewor i his paper has a geera srucure. Proposed ewor suppors recovery ad recycig aciviies ad hece ca be appied i differe idusries (Pishvaee ad Torabi,2010:161). Decisio horizo i he proposed ode icudes ui periods. As a resu fow quaiies bewee each faciiy beogig o differe echeos are deeried accordig o dead, capaciy, cos ad oher periodic-based paraeers a each period. This approach eabes us o iegrae he acica decisio such as seecio of vehice ype or aeria fow decisios wih he sraegic eve decisio ie ocaio of faciiies (see (She,2007:3)). Fig-1: The Srucure of Cosed-Loop Suppy Chai i he Sudied Newor 3. MODEL FORMULATION I his secio, a cosed-oop suppy chai ewor desig ode is proposed. I ivoves hree obecive fucios: (1) iiizaio of he oa coss, (2) axiizaio of suppiers ras ad (3) iiizaio of oa deivery ie of producs (by cosiderig iporace vaue ad dead of each cusoer zoe). A 311

4 uber of sudies have aso ae io accou siiar obecives (e.g., (Torabi ad Hassii,2008:159, Seaa e a,2007:159, Pishvaee ad Torabi,2010:161)). Differe oaios used for he ode are give beow. Idices: S suppiers (s = 1,,S) R resources ad copoes (r = 1,, R) J cadidae ocaio for disribuio ceers ( = 1,, J) K fixed ocaio of cusoer zoes ( = 1,, K) L cadidae ocaio for coecio ceers ( = 1,, L) fixed ocaio for recovery ceers ( = 1,, M) N fixed ocaio for recycig ceers ( = 1,, N) vehice ypes ( = 1,, VV) T ie periods ( = 1,, T) Paraeers: d dead of cusoer zoe a period c s fixed cos of reay raificaio o suppier s f fixed cos of opeig disribuio ceer g b aa cx s co cu cq cr cs ch sp sr ap dp fixed cos of opeig coecio ceer fixed cos of opeig recovery ceer fixed cos of opeig recycig ceer rasporaio cos per produc ui fro suppier s o asseber rasporaio cos per produc ui fro suppier s o asseber rasporaio cos per produc ui fro disribuio ceer, o cusoer zoe by vehice ype rasporaio cos per ui of reured producs fro cusoer zoe o coecio ceer rasporaio cos per ui of reured producs fro coecio ceer o recovery ceer rasporaio cos per ui of scraped producs fro coecio ceer o recycig ceer rasporaio cos per ui of recovered producs fro recovery ceer o disribuio ceer Processig cos per ui of produc r a suppier s Processig cos per ui of produc a asseber Processig cos per ui of produc a disribuio ceer 312

5 cp rp pp pa s pv p py pz pw s a ρ sr rr sf sp wv ru r dis Processig cos per ui of produc a coecio ceer recovery cos per ui of produc a recovery ceer axiu capaciy of suppier s aocaed for produc p a each period axiu capaciy of asseber A aocaed for produc p a each period axiu capaciy of disribuio ceer a each period axiu capaciy of vehice ype a each period axiu capaciy of coecio ceer a each period axiu capaciy of recovery ceer a each period axiu capaciy of recycig ceer a each period processig ie per ui of resource r a suppier s processig ie per ui of produc a asseber ui voue of assebed produc rae of reur perceage fro cusoer zoe a period average scrap fracio a period deivery speed fro disribuio by vehice ype weigh vaue of cusoer zoe rae of usage resource r a ui produc disace bewee disribuio ceer ad cusoer zoe Variabes: x quaiy of resources r shipped fro suppier s o asseber a period sr o quaiy of producs shipped fro asseber o disribuio ceer a period quaiy of producs shipped fro disribuio ceer o cusoer zoe by vehice u ype a period quaiy of reured producs shipped fro cusoer zoe o coecio ceer a q period quaiy of recoverabe producs shipped fro coecio ceer o recovery ceer a r period quaiy of scrapped producs shipped fro coecio ceer o recycig ceer a ss period h quaiy of recovered producs shipped fro recovery ceer o disribuio ceer a period rs s ra of suppier s 313

6 σ s v y z w 1 if suppier s is seeced = 0 Oherwise 1 if a disribuio ceer is opeed a ocaio = 0 Oherwise 1 if a coecio ceer is opeed a ocaio = 0 Oherwise 1 if a recovery ceer is opeed a ocaio = 0 Oherwise 1 if a recycig ceer is opeed a ocaio = 0 Oherwise Regardig hese oaios, he cosed-oop suppy chai ewor desig is foruaed by: i f = ( cx + sp ) x + ( co + ap) o + ( cu + dp ) u 1 s sr sr A A s r + cq q + ( cs + cp ) ss + ( cr + cp ) r (1) + ( ch + rp) h + c σ + f v + g y + b z + a w ax f2 rssσ s s i f 3 s s s = = wv u dis sp d (2) (3) Subeced o, xsrs sr pps ; s, (4) u d, 1 ;, + q r (11) xsr (5) q rr d, 1 ;, s oa ; r, ru r (12) a ( o ) pa ; (6) oa + h = u ;, A (13) 314

7 ρ ( oa + h ) v pv ;, (7) sf q = ss ;, q y py ;, (14) (1 sf) q = p ;, (15) h = r (8) r z pz ;, (9), 1 ; ss wpw ;, { } sr A (16) (10) x sr σ sm ; s, (17) v, y, z, w 0,1 ;,,, (18) x, o, u, q, ss, p, h 0 ; s, r, A,,,,,,, (19) 4. IMPLEMENTATION OF THE MODEL To deosrae he vaidiy ad pracicaiy of he proposed ode, a uerica experie is preseed, ad resus are preseed i his Secio. To sove he proposed ode, aog he various agorihs, we appied he progressive search STEP ehod proposed by Beayou e a., i his paper; because his ehod aows a direc copariso bewee a variey of souios ad aso is easier o udersad ad ipee (Seuer,1986). Hece, boh obecives are idividuay opiized ad he souios are arraged i he payoff abe. To geerae souio for he ui-obecive probe, we code a of he aheaica odes i GAMS 22.0 ad he CPLEX 9.0 sover opiizaio sover. Tabe 1 shows he size of his probe. Capaciy daa is show i Tabe 2. The suppiers are raed ad seeced based o he AHP ehod. The hierarchy srucure of suppier seecio cosiss four crieria, aey fiacia (F), quaiy (Q), service (S) ad exe of fiess (EF), ad six suppiers. By usig he AHP ehod, suppiers are raed ad scores cacuaed as: (Suppier 1= 0.19, Suppier 2= 0.18, Suppier 3= 0.16, Suppier 4= 0.16, Suppier 5= 0.17, Suppier 6= 0.14). Tabe 1: Size of Nuerica Experies. suppiers pas poeia disribuio ceers cusoer zoes r poeia coecio ceers poeia recovery ceers poeia recycig ceers vehice ype ie periods 315

8 Tabe 2: Capaciy Daa for he Exape Newor i Each Period. Suppiers, Asseber Disribuio Vehice ype, Coecio s=(1-6) ceer, =(1-2) ceer, (800, 1000, 700, 1100, 1000, 1000) =(1-6) 2200 (1000, 700, 300, 800, 800, 1200) = (1-2) Recovery ceer, =(1,2) Recycig ceer, = (1,2) (8000, 5000) (700, 300) (900,850) (300,350) For he give se of daa, he opia vaue of cos is obaied as (519,522) ad he correspodig coposie uber for suppier ra ad deivery ie are as 0.69 ad (43.2), respecivey. Correspodigy, as show i Tabe 3, suppier ra ad deivery ie obecives are opiized ad he coposie vaues obaied. Tabe 3: Pay-off abe. Variabe Cos Suppier ra Deivery ie Cos (519,522) (909,688) (937,111) Suppier ra Deivery ie (43.2) (40.993) (14.35) Based o he obaied opiu vaues show i Tabe 3, weighs o obecives (=1,2,3) are cacuaed ad subsequey, he firs ieraio souio usig Eqs. (20) ad (21) gives he vaue as F = (565533,0.59,14.35). i : γ γ f f x π = * s.., ( ( ))., 1, 2,..., x D γ 0 (20) * i ω f f 1 (3) (3) (2) π = ; ω =, ; c ( ), * i = c α i c c i i f 2 (21) ω ( c ) i= 1 i = 1 Ahough he DMs are happy wih he coposie uber of cos ad deivery ie (hese obecives are saisfacory, ), hey are o happy wih he souio ad ed o choose a higher vaue of suppier ra (his obecives is usaisfacory, 316

9 ). Hece, for he secod ieraio, he feasibe regio of probe is odified as Eq. (22) o icorporae he DMs preferece. The souio o (22) by Δf 3 =10 gives he vaue F = (587243,0.77,24.35) ad DMs are happy wih he ubers ad obaied souio as a o-doiaed oe. Sesiiviy aaysis ca be doe by choosig differe vaues of Δf. I is o be oed ha if he se of eiies or heir characerisics of he DMs chage, he choice of he SCN ca aso chage. As a resu, his ype of aaysis is ore vauabe for sraegic decisio aig copared o acica or operaioa oe. 5. CONCLUSION AND FUTURE RESEARCH I his paper, a ui-obecive ode for decisio aig i a cosed-oop suppy chai ewor was sudied. The proposed CSCN iegraes he ewor desig decisios i boh forward ad reverse suppy chai ewors ad aso icorporaes he acica decisios wih sraegic oes siuaeousy due o preve subopiaiy caused by he separaed desig. To adap he ode o rea-word codiios, fudaea ad ogica issues, such as seecio of opia suppiers ad iporace vaue of cusoer zoes, which heaviy affec o he overa suppy chai perforace, are cosidered. The, o sove he MOMILP ode, we appied STEP ehod. Fiay, here are soe direcios o iprove his paper i fuure research. To ach he ode o acua codiios, paraeers such as dead ad cos ca be defied i a fuzzy aure. I addiio, cosiderig soe oher acica decisios ad sraegic oes is aso a vauabe research direcio. Acowedge The auhors are graefu o he Ea Ceer of Advaced Sciece ad Techoogy (ECAST) for heir suppor o his wor. Refereces Feischa, Boehof-Ruwaard, Beues, Deer (2004), Reverse ogisics ewor desig, (i: Deer, Feischa, Iderfurh, Va Wassehove Reverse Logisics, Quaiaive Modes for Cosed-oop Suppy chais, Spriger, pp (22) 317

10 Pishvaee, Joay, Razi (2009), A sochasic opiizaio ode for iegraed forward/reverse ogisics ewor desig, Joura of Maufacurig Syses, Vo.28, pp Viodh, Raiya, Gauha (2011), Appicaio of fuzzy aayic ewor process for suppier seecio i a aufacurig orgaizaio, Exper syse wih appicaio, Vo. 38, pp Saay (1980), The Aayic Hierarchy Process, McGraw-Hi, New Yor. Koagu, Susuz (2008), Iegraed aayica hierarch process ad aheaica prograig o suppier seecio probe wih quaiy discou, Appied Maheaica Modeig, Vo.33, No.3, pp Pishvaee, Torabi (2010), A possibiisic prograig approach for CSCND uder uceraiy, Fuzzy Ses ad Syses, Vo. 161, pp She (2007), Iegraed suppy chai desig odes: a survey ad fuure research direcios, Joura of Idusria ad Maagee Opiizaio, Vo.3, No.1. pp Torabi, Hassii (2008), A ieracive possibiisic prograig approach for uipe obecive suppy chai aser paig, Fuzzy Ses ad Syses, Vo.159, pp Saea, Barbosa-Povoa, Novais (2007), A opiizaio ode for he desig of a capaciaed ui-produc reverse ogisics ewor wih uceraiy, Europea Joura of Operaioa Research, Vo. 179, pp Beayou, Deogofier, Tergy, Larichev ( 1971), Liear Prograig wih uipe obecive fucios: STEP ehod, Maheaica Prograig, Vo.1, pp Seuer (1986), Muipe Crieria Opiizaio, Theory, Copuaio ad Appicaios, Wiey, New Yor. 318