A Novel Interactive Fuzzy Programming Approach for Optimization of Allied Closed-Loop Supply Chains

Abstract

In recent years, the relationship between companies and suppliers has changed with the continuous rise in environmental awareness and customer expectations. In order to fulfill customers’ needs, the actors in a Supply Chain (SC) network sometimes compete and sometimes cooperate with each other. In SC management, both competitive and collaborative strategies have become important and have required different points of view. In a collaborative environment, companies should strive for common targets with mutual relationship. After managers decided to share their resources, some positive effects have appeared on the companies and suppliers’ performance such as profitability, flexibility and efficiency. Consequently, many companies are willing to cooperate with each other in a SC network because of these reasons. On the other hand, Closed-Loop Supply Chain (CLSC) management has been attracting a growing interest because of increased environmental issues, government regulations and customer pressures. Based on this initiative, our paper presents a novel allied CLSC network design model with two different SCs including common suppliers and common collection centers. First, a decentralized multi-level Mixed-Integer Linear Programming (MILP) model that consists of two different levels of Decision Makers (DMs) is developed. The plants of common SCs comprise the upper-level DMs, common suppliers, common collection centers, and the logistics firm comprises the lower-level DMs. A novel Interactive Fuzzy Programming (IFP) approach using Fuzzy Analytic Hierarchy Process (AHP) is proposed to obtain a preferred compromise solution for the developed model. Through use of Fuzzy AHP in the proposed IFP approach, the DMs can identify the importance of the lower-level DMs. In order to validate the developed model and the proposed IFP approach, a numerical example is implemented. According to the obtained results, our proposed IFP method outperforms Sakawa and Nishizaki’s1 and Çalik et al.‘s2 approach with respect to the satisfaction degrees of upperlevel DMs for the developed CLSC model. © 2018, the Authors.