Modeling and multi-objective optimization of closed loop supply chains: A case study

This study investigates the issue of optimizing the asset management process in a real closed-loop supply chain (CLSC), consisting of a pallet provider, a manufacturer and 7 retailers. A detailed simulation model, based on an adapted economic order quantity (EOQ) policy is developed under Microsoft Excel (TM) to reproduce the reorder process of assets by the manufacturer and the corresponding flow of returnable transport items (RTIs) in the CLSC. A multi-objective optimization, including both economic and strategic key performance indicators of the system, is then carried out exploiting the commercial software ModeFRONTIER (TM). The optimization investigates three scenarios, which refer to as many operating conditions of the manufacturer. Scenario 1 basically reproduces the current operating conditions of the manufacturer, while scenarios 2 and 3 are both hypothetical, and describe situations where the manufacturer would like to minimize the purchase of new assets and the pick-up of assets from its customers, respectively. For each scenario, the optimal configuration (i.e., the setting of the asset management process that performs best in the multi-objective optimization) is identified. Scenarios 1 and 3 are found to generate the most interesting performance of the assets management process, from both the economic and strategic perspectives. Because the present paper is grounded on a real CLSC, the results are expected to be useful to logistics and supply chain managers, to support the evaluation of the performance of CLSCs. (C) 2015 Elsevier Ltd. All rights reserved.