Simulation optimisation of a sustainable copper mining closed-loop supply chain

Abstract

This paper addresses the problem of designing a supply chain (SC) according to sustainability aspects. It identifies a research gap where an optimisation model to address the location, inventory and transportation decision in a sustainable SC applied to a copper mining industry by complementarily using a simulation model to assess SC performance in different scenarios is needed. For this purpose, we propose a simulation model based on system dynamics (SD) to assess SC performance and to support decision making. The basis of the simulation model structure is a multi-objective mixed-integer linear programming model that aims to minimise total economic, emissions and social costs, and to also contemplate social impacts. We consider a real copper mining industry problem to illustrate this. We obtain a solution using a mathematical programming model and a simulation model. The optimisation results show improved SC performance in cost and emission reduction terms, and an improved social impact. The simulation model presents a near-optimal result and allows the possibility of anticipating adverse scenarios. Future research is oriented to other real-world applications, and to: consider alternative inventory policies; contemplate a stochastic approach; add new production and routing decisions; develop a hybrid multi-agent SD model.