The Integrated Production-Inventory-Routing Problem with Reverse Logistics and Remanufacturing: A Two-Phase Decomposition Heuristic

Abstract

Sustainable supply chains depend on three critical decisions: production, inventory management, and distribution with reverse flows. To achieve an effective level of operational performance, policymakers must consider all these decisions, especially in Closed-Loop Supply Chains (CLSCs) with remanufacturing option. In this research paper, we address the Integrated Production-Inventory-Routing Problem with Remanufacturing (IPIRP-R) of returned End-Of-Life (EOL) products. The aim behind solving this optimization problem is to minimize conjointly the total manufacturing, remanufacturing, setup, inventory, and routing costs over the planning horizon. A two-phase decomposition heuristic is developed to solve the model iteratively. Our study finds its originality in the fact of jointly optimizing the Capacitated Lot-Sizing Problem with Remanufacturing (CLSP-R) option and the Vehicle Routing Problem with Simultaneous Pick-up and Delivery (VRPSPD) in a single framework. Numerical results showed that our solution approach provides good solutions regarding small and medium-scale size instances under acceptable computational time, especially for problems occurring with significant manufacturing and remanufacturing costs under relatively low pickup requests.