Integrated forward-reverse logistics network design under uncertainty and reliability consideration

Abstract

This paper proposes a robust optimization model for robust and reliable design of an integrated forward-reverse logistics network with hybrid facilities under uncertainty and random facility disruptions. The proposed model utilizes several effective reliability strategies to mitigate the impact of random facility disruptions. First, the proposed model allows two types of hybrid facilities, namely, reliable and unreliable, to be located in the concerned logistics network where unreliable ones may be partially or fully disrupted, and thus a percentage of their capacities may be lost. However, they can still serve their customers with the remaining of their available capacities. Furthermore, a sharing strategy is taken into account, in which goods can be shipped from reliable hybrid facilities to unreliable ones to compensate their lost capacity. A robust optimization approach is applied on the developed model to handle the uncertainties in the parameters of the concerned network. Finally, several numerical experiments along with a sensitivity analysis are conducted to illustrate the significance and applicability of the proposed model as well as the effectiveness of the robust optimization approach in this context.