Competitive closed-loop supply chain network design with price-dependent demands

Abstract

This paper presents a bi-level model for the strategic reverse network design (upper level) and tactical/operational planning (lower level) of a closed-loop single-period supply chain operating in a competitive environment with price-dependent market demand. An existing supply chain (SC) is involved in the manufacturing and distribution of new products, while the new (to-be-designed) rival SC can supply both new and remanufactured products. Competitions exist not only externally between the two chains supplying new products to the same market, but also internally in the new chain for the supply of new and remanufactured products. The performance behaviors of both SCs are evaluated with specific focus placed on investigating the impacts of the strategic facility location decisions of the new SC on the tactical/operational transport and inventory decisions of the overall network. The bi-level model and a modified projection solution technique are implemented to tackle a realistic case example.