A Mathematical Programming Model with Equilibrium Constraints for Competitive Closed-Loop Supply Chain Network Design

Yuxiang Yang, Zuqing Huang, Qiang Patrick Qiang, Gengui Zhou

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Abstract

A firm sets up his facilities including manufacturing/remanufacturing plants and distribution/collection centers, incorporating an existing closed-loop supply chain (CLSC) network. The entering firm has to compete with the existing firms in the existing network. The entering firm behaves as the leader of a Stackelberg game while the existing firms in the existing network are followers. We assume that the entering firm can anticipate the existing firms' reaction to his potential location decision before choosing his optimal policy. We use a CLSC network equilibrium model in which the decision makers are faced with multiple objectives to capture the existing firms' reaction. A mathematical programming model with equilibrium constraints is developed for this competitive CLSC network design problem by taking into account the market competition existing in the decentralized CLSC network. A solution method is developed by integrating Genetic algorithm with an inexact logarithmic-quadratic proximal augmented Lagrangian method. Finally, numerical examples and the related results are studied for illustration purpose.

Original languageEnglish (US)
Article number1750026
JournalAsia-Pacific Journal of Operational Research
Volume34
Issue number5
DOIs
StatePublished - Oct 1 2017

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All Science Journal Classification (ASJC) codes

  • Management Science and Operations Research

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