A viable and bi-level supply chain network design by applying risk, robustness and considering environmental requirements

Reza Lotfi (), Farzaneh Shoushtari, Sadia Samar Ali, Sayyed Mohammad Reza Davoodi, Mohamad Afshar and Mohammad Mehdi Sharifi Nevisi
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Reza Lotfi: Yazd University
Farzaneh Shoushtari: Bu-Ali Sina University
Sadia Samar Ali: King Abdulaziz University
Sayyed Mohammad Reza Davoodi: Islamic Azad University
Mohamad Afshar: Islamic Azad University
Mohammad Mehdi Sharifi Nevisi: Iran University of Science and Technology

Central European Journal of Operations Research, 2025, vol. 33, issue 4, No 13, 1473-1501

Abstract: Abstract The study proposes a new Supply Chain Network Design (SCND) incorporating Viability with Bi-Level decisions (VSCNDBLP). Specifically, this approach uses the maximum CO2 as the leader function, the expected value, and the maximum cost as the follower function to address this issue effectively. In addition, this study recommends implementing viability policies to manage the resiliency strategy by utilizing flexible capacity, availability coefficients, and facility reliability levels. The sustainability approach can be addressed by imposing emission constraints, while the agility method can be incorporated by prioritizing demand satisfaction. Furthermore, this research suggests focusing on risk management by utilizing stochastic optimization and ensuring robustness by integrating a robust bi-level stochastic optimization framework. This research focuses on automotive parts manufacturing, a thriving industry known for its substantial sales and significant added value. This work, which considers CO2 policy, is compared with situations that are not considered CO2 policy. It is found that considering CO2 policy decreases CO2 by up to − 3.4%, but it increases cost by up to 1.14%. Therefore, reducing CO2 is more important than costs in this complex situation where people’s health is essential.

Keywords: Viability; Supply chain; Bi-level programming; Risk; Robustness (search for similar items in EconPapers)
Date: 2025
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DOI: 10.1007/s10100-024-00929-w

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