This paper considers a location-allocation problem in a closed-loop supply chain (CLSC) with two extensions: first, demand and prices of new and return products are regarded as non-deterministic parameters and second, the objective function is developed from expected profit to three types of mean-risk ones. Indeed, design and planning an integrated CLSC in real-world volatile markets is an important and necessary issue. Further, risk-neutral approaches, which are considered expected values, are not efficient for such uncertain conditions. Hence, this paper, copes with the design and planning problem of a CLSC in a two-stage stochastic structure. Besides, risk criteria are considered through using three types of popular and well-behaved risk measures: mean absolute deviation, value at risk and conditional value at risk (CVaR). Consequently, three types of mean-risk models are developed as objective functions and decision-making procedures are undertaken based on the expected values and risk adversity criteria. Finally, performances of the developed mean-risk models are evaluated in various aspects. Results reveal that the inefficiencies of risk-neutral approaches can be overcome. In addition, in terms of quality of solutions, the acceptability of CVaR is proved when it is compared to other risk measures.
International Journal of Production Research, 2014, Vol 52, Issue 6, p. 1843-1867