A Location-Inventory Problem in a Closed-Loop Supply Chain with Secondary Market Consideration

Hao Guo, Congdong Li, Ying Zhang, Chunnan Zhang and Mengmeng Lu
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Hao Guo: School of Management, Jinan University, Guangzhou 510632, China
Congdong Li: School of Management, Jinan University, Guangzhou 510632, China
Ying Zhang: Department of Industrial and Systems Engineering, The State University of New York at Buffalo, Buffalo, NY 14260, USA
Chunnan Zhang: Department of Accounting, Temple University, Philadelphia, PA 19122, USA
Mengmeng Lu: School of Information Management, Central China Normal University, Wuhan 430079, China

Sustainability, 2018, vol. 10, issue 6, 1-20

Abstract: To design sustainable supply chain systems in today’s business environment, this paper studies a location-inventory problem in a closed-loop supply chain by considering the sales of new and used products in the primary and secondary markets, respectively. This problem is formulated as a mixed-integer nonlinear program to optimize facility location and inventory management decisions jointly, and the logistics flows between the two markets are modeled dynamically. To solve this problem efficiently, a new heuristic approach is also developed by introducing an effective adaptive mechanism into differential evolution. Finally, numerical experiments are presented to validate the solution approach and provide valuable managerial insight. This paper makes a meaningful contribution to the literature by incorporating the secondary market into the study of closed-loop supply chains, and practically, it is also greatly beneficial to improve the sustainability and efficiency of modern supply chains.

Keywords: location-inventory problem; secondary market; closed-loop supply chain; reverse logistics; consumer returns; differential evolution; mixed-integer nonlinear programming; sensitivity analysis (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2018
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7)

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