1 Department of Business and Economics, Faculty of Business and Social Sciences, SDU 2 unknown 3 SDU Engineering Operations Management, Institute of Technology and Innovation, Faculty of Engineering, SDU 4 SDU Engineering Operations Management, Institute of Technology and Innovation, Faculty of Engineering, SDU
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. © 2013 Taylor & Francis.
International Journal of Production Research, 2014, Vol 52, Issue 6, p. 1843-1867
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