Incorporating Price-Dependent Demands into a Multi-Echelon Closed-Loop Network Considering the Lost Sales and Backorders: a Case Study of Wireless Network

Abstract

This study renders a location-inventory problem for a closed-loop supply chain network under the circumstance of price-dependent demands, in which there are suppliers/recovering centers, stores and consumer areas. In this respect, the demand is supposed to be correlated, and the inventory of new and returned products are controlled via a continuous review system (Q, r) in the stores. What is more, the shortage is allowed and could be emerged as back-ordered and lost sales. A nonlinear programming model is offered to formulate the problem, which maximizes the total profit of the supply chain. In this regard, miscellaneous decisions are determined, such as location-allocation facilities, inventory levels and prices of products. So as to solve the proposed model, two well-known meta-heuristic algorithms with particular encoding and decoding procedures, including a genetic algorithm (GA) and an imperialist competitive algorithm (ICA), are employed due to the Np-hard nature of the model. Finally, with the intention of illustrating the validation and applicability of the model, a real case study of a wireless network is investigated.