Designing a multi-objective closed-loop supply chain: a two-stage stochastic programming, method applied to the garment industry in Montréal, Canada

Abstract

The global population continues to grow, which expands demand for raw materials. Meanwhile, governments are developing circular economy strategies within cities and their industries. A circular economy utilizes refurbishing, reusing, remanufacturing, and repairing of products and materials. For companies, this involves to set targets and to rethink their supply chain. This paper seeks to model an exhaustive multi-echelon closed-loop supply chain (CLSC) network. This network functions within uncertainty, and the model optimizes three different objectives. The first objective function maximizes the network's profit; the second objective function minimizes network emissions. The last objective function maximizes job positions created by the network. Optimizing three contradicting objectives is a problem, so an augmented epsilon constraint method is applied to improve the model. Given the rise of fast fashion in developed countries, this model is used in the clothing industry in Montreal, Canada. The model includes three scenarios over five years with two types of products. The result shows the attractiveness of such a network for companies looking for profit, sustainability, and entrepreneurship in the garment industry.