A two-stage robust programming approach to demand-driven disassembly planning for a closed-loop supply chain system

Abstract

The closed-loop supply chain system, which integrates forward and reverse logistics, is a desirable policy for retaining recoverable resources and extending the life cycles of products. In this study, we propose a methodology to contend with a demand-driven disassembly planning problem under a closed-loop supply chain system. A two-stage robust programming model is developed correspondingly, such that multiple products with a hierarchical product's structure are disassembled to satisfy uncertain demands in multiple periods. The objective of the model is to determine a robust decision for recycle volume and timing of each type of end-of-life (EOL) product, as well as recovery strategies. The results provide two-stage decisions by considering future scenarios of periodic demands at the beginning of a planning horizon. The first-stage decision is to determine a compromise solution that is close to the optimal solution for every scenario while retaining a certain level of infeasibility of constraints, such as unsatisfied demand. Afterward, when the outcome of a scenario has been realised, the second-stage decision, such as, inventory volume, is conducted to become a buffer for mitigating uncertain impacts. Furthermore, the computational results confirm the trade-off relationship between solution robustness and model robustness, which are core results of the robust model apart from expected profit. The different types of decision makers’ preferences toward risk can be accounted for to determine a compromise robust solution.

Keywords:

• demand-driven disassembly
• closed-loop supply chain
• end-of-life recovery
• robust programming

Acknowledgements

The authors acknowledge financial support from National Science Council with project number NSC 97-2221-E007-092-MY3.