A two-stage stochastic and robust programming approach to strategic planning of a reverse supply network: The case of paper recycling

Paper is an example of a valuable material that can be recycled and recovered. In this study, a two-stage stochastic revenue-maximization model is presented to determine a long-term strategy under uncertainty for a large-scale real-world paper recycling company. This network-design problem includes optimal recycling center locations and optimal flow amounts between the nodes in the multi-facility environment. The proposed model is formulated with two-stage stochastic mixed-integer and robust programming approaches. The models are solved by commercial software GAMS 21.6/CPLEX 9.0 and the results are compared. The study is followed by the analyses of the results. (C) 2010 Elsevier Ltd. All rights reserved.