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A coordinated location-inventory problem in closed-loop supply chain
Institution:1. Department of Industrial Engineering, Tsinghua University, Beijing 100084, China;2. Department of Civil and Environmental Engineering, Portland State University, PO Box 751 - CEE, Portland, OR 97207, USA;1. Department of Civil and Environmental Engineering, University of Michigan, 2350 Hayward, 1036 GG Brown, Ann Arbor, MI 48109, USA;2. Department of Civil and Environmental Engineering, Engineering Building, 301D, 1930 SW 4th Avenue, Portland State University, Portland, OR 97201, USA;3. Department of Civil, Architectural and Environmental Engineering, The University of Texas at Austin, 301 E. Dean Keeton St. Stop C1761, Austin, TX 78712-1172, USA;1. Department of Mathematics and Industrial Engineering, Polytechnique Montréal, Montréal H3C 3A7, Canada;2. CIRRELT, Montréal H3C 3A7, Canada;3. Research Center on Modern Logistics, Graduate School at Shenzhen, Tsinghua University, Shenzhen 518055, China;4. Zhejiang Cainiao Supply Chain Management Co., Ltd., Hangzhou 310000, China
Abstract:This paper considers a coordinated location-inventory model under uncertain demands for a closed loop supply chain comprising of one plant, forward and reverse distribution centers, and retailers. The inventory of new and returned products is managed at forward and reverse distribution centers respectively through a periodic review policy. The proposed model determines the location of forward and reverse distribution centers and the associated capacities, the review intervals of the inventory policy at distribution centers, and the assignments of retailers to the distribution centers. We model six different coordination strategies. All the models are formulated as nonlinear integer programs with chance constraints and transformed to conic quadratic mixed-integer programs that can be efficiently solved by CPLEX. An outer approximation based solution algorithm is developed to solve the conic quadratic mixed-integer program. The benefit of different types of coordination strategies is shown through extensive computational testing.
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