Designing a sustainable closed-loop pharmaceutical supply chain in a competitive market considering demand uncertainty, manufacturer’s brand and waste management

Abstract

Pharmaceutical supply chain (PSC) is one of the most important healthcare supply chains and the recent pandemic (COVID-19) has completely proved it. Also, the environmental and social impacts of PSCs are undeniable due to the daily entrance of a large amount of pharmaceutical waste into the environment. However, studies on closed-loop PSCs (CLPSC) are rarely considered real-world requirements such as competition among diverse brands of manufacturers, the dependency of customers’ demand on products’ price and quality, and diverse reverse flows of end-of-life medicines. In this study, a scenario-based Multi-Objective Mixed-Integer Linear Programming model is developed to design a sustainable CLPSC, which investigates the reverse flows of expired medicines as three classes (must be disposed of, can be remanufactured and can be recycled). To study the competitive market and deal with demand uncertainty, a novel scenario-based game theory model is proposed. The demand function for each brand depends on the price and quality provided. Then, a hybrid solution approach is provided by combining the LP-metrics method with a heuristic algorithm. Furthermore, a real case study is investigated to evaluate the application of the model. Finally, sensitivity analysis and managerial insights are provided. The numerical results show that the proposed classification of reverse flows leads to proper waste management, making money, and reducing both disposal costs and raw material usage. Moreover, competition increases PSCs performance and improves the supply of products to pharmacies. Supplementary Information The online version contains supplementary material available at 10.1007/s10479-021-03961-0.

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