Reverse logistics network design and planning utilizing conditional value at risk

摘要

Nowadays, due to some social, legal, and economical reasons, dealing with reverse supply chain is an unavoidable issue in many industries. Besides, regarding real-world volatile parameters, lead us to use stochastic optimization techniques. In location–allocation type of problems (such as the presented design and planning one), two?tage stochastic optimization techniques are the most appropriate and popular approaches. Nevertheless, traditional two?tage stochastic programming is risk neutral, which considers the expectation of random variables in its objective function. In this paper, a risk-averse two?tage stochastic programming approach is considered in order to design and planning a reverse supply chain network. We specify the conditional value at risk (CVaR) as a risk evaluator, which is a linear, convex, and mathematically well-behaved type of risk measure. We first consider return amounts and prices of second products as two stochastic parameters. Then, the optimum point is achieved in a two?tage stochastic structure regarding a mean-risk (mean-CVaR) objective function. Appropriate numerical examples are designed, and solved in order to compare the classical versus the proposed approach. We comprehensively discuss about the effectiveness of incorporating a risk measure in a two?tage stochastic model. The results prove the capabilities and acceptability of the developed risk-averse approach and the affects of risk parameters in the model behavior.