Considering chain to chain competition in forward and reverse logistics of a dynamic and integrated supply chain network design problem

Abstract

In this paper, a bi-objective model is presented for dynamic and integrated network design of a new entrant competitive closed-loop supply chain. To consider dynamism and integration in the network design problem, multiple long-term periods are regarded during planning horizon, so that each long-term period includes several short-term periods. Furthermore, a chain to chain competition between two rival supply chains is considered in both forward and reverse logistics. In the forward logistics, the rivals have to compete on the selling price, while in the reverse logistics, the supply chains compete on incentive buying price to achieve more market share. To solve the competitive stage of the proposed model, a game theoretic approach, which determines the selling and incentive buying prices of forward and reverse logistics, is used. Based on the competitive stage's outputs, the resulted dynamic and integrated network design stage is solved using a Pareto-based multi-objective imperialist competitive algorithm. Finally, to evaluate efficiency of the proposed model and solution approach, a numerical study is implemented.