Sustainable tire supply chain network design and operations planning using a multi objective , scenario-based optimization approach

Abstract

Each year, millions of tires reach their end of life. Worn-out tires are either buried or burned, both of which harm the environment through polluting the air and groundwater. Companies need to consider their social responsibility, such as employment and regional development, and the environmental impact of their activities when making strategic and operational decisions. This study addresses the closed-loop supply chain network design (SCND) and operations planning problem with regard to the three dimensions of sustainability using a mathematical programming approach. The options of retreading, recycling, and energy recovery together with the use of green technologies are considered to minimize the environmental impacts. The proposed decision model can help supply chain managers in tire manufacturing industry make better-informed decisions in order to achieve the three-fold objectives of sustainability. The developed mathematical model turns out to be a multi-objective, multi-echelon, and multi-product mixed integer linear programming. The model is solved using the Lp-metric method and CPLEX solver. The scenario approach is used to address the uncertainty in demand of new products and the rate of return of worn-out tires. The model solutions are the optimal location of the facilities considering population density and unemployment rate in addition to economic dimension, the optimal amount of allocation, the flow of materials, and the best green technology selection. Sensitivity analysis is also conducted to validate the model and test the robustness of the obtained solutions. Finally, managerial implications are provided.