Closed-loop Inventory Routing Problem for returnable transport items |
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| Institution: | 1. College of Business Administration, University of Tennessee, Knoxville, TN 37996, USA;2. College of Business and Law, University of Canterbury, Christchurch, New Zealand;1. Institute of Production and Supply Chain Management, Department of Law and Economics, Technische Universität Darmstadt, Hochschulstr. 1, 64289 Darmstadt, Germany;2. Department of Industrial Engineering, Hanyang University, 222 Wangsimni-ro, Seongdong-gu, Seoul, 04763, Republic of Korea;1. Department of Economics and Management, University of Brescia, Contrada Santa Chiara 50, 25122 Brescia, Italy;2. ITACA S.r.l., Ponte P. Bucci 41C, 87036 Arcavacata di Rende (CS), Italy;3. Department of Mechanical, Energy and Management Engineering, University of Calabria, Ponte P. Bucci 41C, 87036 Arcavacata di Rende (CS), Italy;1. Production and Quantitative Methods Area, Indian Institute of Management, Ahmedabad, Gujarat 380015, India;2. Dept. of Industrial and Systems Engineering, Auburn University, Auburn, AL 36849, United States;3. Dept. of Industrial and Systems Engineering, Rensselaer Polytechnic Institute, Troy, NY 12180, United States;4. Dept. of Industrial Engineering and Management, Oklahoma State University, Stillwater, OK 74074, United States;1. ESC Rennes School of Business, 2 rue Robert D''Arbrissel, 35065, Rennes, France;2. Department of Industrial Engineering & Management Systems, Amirkabir University of Technology, Iran;3. EMLYON Business School, DISP Lab, 23 avenue Guy de Collongue, 69134, Ecully, France;4. Department of Industrial Engineering, Iran University of Science & Technology, Iran |
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| Abstract: | Increasing concerns on supply chain sustainability have given birth to the concept of closed-loop supply chain. Closed-loop supply chains include the return processes besides forward flows to recover the value from the customers or end-users. Vendor Managed Inventory (VMI) systems ensure collaborative relationships between a vendor and a set of customers. In such systems, the vendor takes on the responsibility of product deliveries and inventory management at customers. Product deliveries also include reverse flows of returnable transport items. The execution of the VMI policy requires vendor to deal with a Closed-loop Inventory Routing Problem (CIRP) consisting of its own forward and backward routing decisions, and inventory decisions of customers. In CIRP literature, traditional assumptions of disregarding reverse logistic operations, knowing beforehand distribution costs between nodes and customers demand, and managing single product restrict the usage of the proposed models in current food logistics systems. From this point of view, the aim of this research is to enhance the traditional models for the CIRP to make them more useful for the decision makers in closed-loop supply chains. Therefore, we propose a probabilistic mixed-integer linear programming model for the CIRP that accounts for forward and reverse logistics operations, explicit fuel consumption, demand uncertainty and multiple products. A case study on the distribution operations of a soft drink company shows the applicability of the model to a real-life problem. The results suggest that the proposed model can achieve significant savings in total cost and thus offers better support to decision makers. |
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| Keywords: | Closed-loop Inventory Routing Greenhouse gas emissions Energy consumption Closed-supply chains |
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