OPTIMAL SOURCING DECISIONS FOR UNRELIABLE REVERSE SUPPLY CHAINS

Anastasios Xanthopoulos, Dimitrios Vlachos and Eleftherios Iakovou ()
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Anastasios Xanthopoulos: Industrial Management Division, Department of Mechanical Engineering, Aristotle University of Thessaloniki, P. O. Box 461, 54124 Thessaloniki, Greece
Dimitrios Vlachos: Industrial Management Division, Department of Mechanical Engineering, Aristotle University of Thessaloniki, P. O. Box 461, 54124 Thessaloniki, Greece
Eleftherios Iakovou: Industrial Management Division, Department of Mechanical Engineering, Aristotle University of Thessaloniki, P. O. Box 461, 54124 Thessaloniki, Greece

Asia-Pacific Journal of Operational Research (APJOR), 2011, vol. 28, issue 01, 125-146

Abstract: In this work, we propose a single period stochastic inventory decision-making model that captures the trade-off between inventory policies and disruption risks for unreliable (both uncapacitated and capacitated) dual-sourcing reverse supply chain networks. Risk-management has emerged high at the corporate agenda as globalised supply chain networks are more stretched than ever due to offshoring and thus are more exposed to disruptions, while reverse logistics has been proven to constitute a profit center. In this environment, global companies have to scrutinize especially the role of major Asian economies (with large manufacturing capacities and huge markets), while conducting their strategic procurement planning. The developed model can be applied to a number of different scenario types encompassing various instances of disruptions to the collection of the end-of-life products, of the transportation system, and of the remanufacturing yield and capacity. Analytical closed-form solutions are obtained and important managerial insights on the merit of contingency strategies in managing uncertainties for reverse logistics networks are discussed.

Keywords: Reverse logistics; supply chain management; supply chain disruptions; stochastic modeling; inventory policies; sourcing decisions (search for similar items in EconPapers)
Date: 2011
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DOI: 10.1142/S0217595911003090

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