A new robust optimization model under uncertainty for new and remanufactured products

Abstract

Owing to the rapid growth of environmental and managerial issues, remanufacturing of products has emerged as a significant topic. The main focus of this paper is on the uncertainty in a closed-loop supply chain network, and a robust optimization technique is presented to overcome it. In this regard, an uncertain interval-based robust optimization model with two distinct demand streams is proposed; simultaneously, the uncertainty of shortage and penalty costs are taken into account for both new and remanufactured products, which have distinguished behaviors. To illustrate the preference of the proposed robust model, the optimality of deterministic and robust optimization models is examined in different test problems. The solution reveals that the proposed methodology performs very well in terms of the quality of the solutions obtained.

Keywords::

• supply chain
• robust optimization
• uncertainty

JEL Classification::

• C61
• D81
• Q21
• R41

Acknowledgements

The authors are grateful to the anonymous reviewers for constructive and fruitful comments which led to improvement in this paper.