Robust and reliable forward-reverse logistics network design under demand uncertainty and facility disruptions

There are two broad categories of risk, which influence the supply chain design and management. The first category is concerned with uncertainty embedded in the model parameters, which affects the problem of balancing supply and demand. The second category of risks may arise from natural disasters, strikes and economic disruptions, terroristic acts, and etc. Most of the existing studies surveyed these types of risk, separately. This paper proposes a robust and reliable model for an integrated forward reverse logistics network design, which simultaneously takes uncertain parameters and facility disruptions into account. The proposed model is formulated based on a recent robust optimization approach to protect the network against uncertainty. Furthermore, a mixed integer linear programing model with augmented p-robust constraints is proposed to control the reliability of the network among disruption scenarios. The objective function of the proposed model is minimizing the nominal cost, while reducing disruption risk using the p-robustness criterion. To study the behavior of the robustness and reliability of the concerned network, several numerical examples are considered. Finally, a comparative analysis is carried out to study the performance of the augmented p-robust criterion and other conventional robust criteria. (c) 2013 Elsevier Inc. All rights reserved.