Closed loop supply chain network design

In this thesis, we study the closed loop supply chain network design problem, which integrates reverse flows and reverse supply chain activities into the traditional forward supply chain activities. This network design problem requires strategic and tactical level decisions to be taken into account simultaneously. Within this context, a multi product and capacitated mixed integer linear programming model is developed. At the strategic level, the model decides where to open production and recovery facilities and which existing facilities to close. At the tactical level, the model decides on the amount of products that are obtained either from manufacturing or recovery to send to customers in the forward direction, the amount of used products to send from the customers to the recovery facilities in the reverse direction, and the total amount of products to be processed in production and recovery facilities. The aim of the proposed model is to maximize total profit. In order to achieve this, facility establishment / closing, production and recovery, procurement, capacity establishment, and transportation costs are minimized whereas the revenue obtained from the satisfied demand and recovery options is maximized. In addition to the deterministic model, a scenario based stochastic model considering uncertainty in the demand and return amounts is also proposed. Extensive sensitivity analysis is conducted to observe the effect of changes in the problem parameters on the optimal solutions.