Designing a realistic ICT closed loop supply chain network with integrated decisions under uncertain demand and lead time

Abstract

Abstract In supply chain networks, pricing is a fundamental aspect of the economic modeling, which affects the obtained revenue and profit. Integrating pricing with facility location and inventory control decisions helps the companies to gain the appropriate insight for competing with their rivals. In this study, a mixed integer nonlinear programming model is proposed to consider the mentioned issues in a closed loop supply chain network in information and communications technology (ICT) industry in order to maximize the total profit obtained by selling the new ICT products or collecting the used ICT products. The structure of this network includes suppliers, collection–distribution centers (C–D centers), disassembly centers and customer regions. A continuous review inventory policy is applied in the C–D centers and it is assumed that the orders’ lead time is stochastic. In addition the C–D centers face shortage and there is the correlated demand among the customer regions. Two meta-heuristic algorithms are applied for solving this problem: an imperialist competitive algorithm (ICA) and a genetic algorithm (GA). Also the encoding and decoding procedures of these algorithms are presented. For analyzing the performance of the proposed model and solution approaches, a real case of an ICT closed loop supply chain is studied in Iran. A sensitivity analysis is implemented to investigate the impact of the parameters of the model on the optimal decisions and profit. The numerical results show the way of assigning the facilities to each other, managing the inventory and determining the ICT products’ price. Thus the suggested model and solution methods could help the ICT companies in determining their policies to reach the maximized profit.