ABSTRACT
Chapter 2 presents the network design framework and model for a four-stage Closed-Loop Supply Chain (CLSC) network for a single product, incorporating customer acceptance rate for refurbished products. The optimization model, called the Base Model, is developed to determine the optimal locations of the facilities and the distribution of flows between the facilities in the CLSC network to maximize the total profit. This model is illustrated and analyzed using a realistic example. The chapter also presents detailed analysis on the effect of return parameters on the supply chain design and its profitability. The results show that the total supply chain profit increases with the increase in refurbishing activity. The changes in product return parameters lead to changes in the optimal network design, implying the need to explicitly consider the uncertainty in these return parameters. We also observe that the refurbishing cost influences the network design decisions implying the need to include it in the model. Multi-objective extensions of the model are also discussed.
