Planning an efficient closed-loop supply chain network: a unified single-phase approach

Abstract

Economic incentives, government regulations and customer perspective on environmental consciousness (EC) are driving more and more companies into the product recovery business, which forms a reverse supply chain. The combination of traditional/forward supply chain and reverse supply chain is called a closed-loop supply chain (CLSC). A supply chain involves three stages of planning, viz., strategic, tactical and operational. Strategic planning primarily deals with the design (what products should be processed/produced in what facilities etc) of the supply chain that is typically a long-range planning performed every few years when a supply chain needs to expand its capabilities (Pochampally and Gupta, 2005). Tactical planning involves the optimization of flow of goods and services across the supply chain and is typically a medium-range planning performed on a monthly basis. Finally, Operational planning is a short-range planning that deals with the day-to-day production planning and inventory issues on the factory floor. In this paper, we formulate a single-phase linear physical programming model in designing a closed-loop supply chain. This model when solved addresses simultaneously the critical issues, mentioned above, in the strategic and tactical planning of a CLSC