Simultaneous optimization of operational and financial decisions to closed-loop supply chain network under uncertainty

Abstract

This article integrates the company operations decisions (i.e. location, production, inventory, distribution, and transportation) and finance decisions (i.e. cash, accounts payable and receivable, debt, securities, payment delays, and discounts) in which the demands and return rate are uncertain, defined by a set of scenarios. The cash flow and budgeting model will be coupled with supply chain network design using a mixed integer linear programming formulation. The article evaluates two financial criteria, that is, the change in equity and the profit as objective functions. The results indicate that objective functions are partially interdependent, that is, they conflict in certain parts. This fact illustrates the inadequacy of treating process operations and finances in isolated environments and pursuing objective myopic performance indicators such as profit or cost. Due to the importance of the supply chain network design problem, a multi-objective robust optimization with the max-min version is extended to cope with the uncertainty. A solution approach integrating Benders' decomposition method with the scenario relaxation algorithm is also proposed in this research. The improved algorithm has been applied to solve a number of numerical experiments. All results illustrate significant improvement in computation time of the improved algorithm over existing approaches. For a problem, the proposed algorithm shows a significant reduction in computational time compared with the Benders' decomposition and scenario relaxation that shows the efficiency of the proposed solution method.

Structuring of Industrial Organization Reserves on the Basis of the Golden Section Theory

“…A common approach to the issue of restructuring of the material resources do not exist to date [15,16,17,18,19,20]. The most common method for the preparation of such a classification is the ABC method.…”

Production Decisions of Manufacturing and Remanufacturing Hybrid System Considering Downward Substitution: A Comprehensive Model Integrating Financial Operations

“…Ramezani et al [37] addressed the integration of financial aspects to optimize closed-loop supply chain and showed advantages of proposed model through numerical examples. Then, Ramezani and Kimiagari [38] expanded the previous research by considering stochastic demand and returns. But both of them only study production problem of a single product and ignore the existence of the capital cost.…”

“…The new products are shipped to the markets to satisfy the customers' demands. In the backward direction, similar to [37][38][39][40], one type of recycling process is considered, which will not affect the results proposed in this paper. The used products from customers are shipped to collection center and stored, and then are disassembled, cleaned and inspected.…”

“…Next, referring to [37,38,40,45], a mixed integer stochastic programming model based on scenario analysis is formulated and corresponding notions are shown in Appendix.…”

“…Unlike [37,38], the integrated model considers the capital cost and selects the expected economic value-added EVA as the objective function as shown in Equation 1, which is equal to the difference between the net operating profit after tax NOPAT and total cost of the invested capital as shown in Equation 2. NOPAT is calculated as total marginal profit TMP minus fixed cost FC and corresponding taxes, in which TR represents tax rate.…”