A Two-Stage Stochastic Model for the Design and Planning of a Multi-Product Closed Loop Supply Chains

In this paper we address the problem of uncertainty in the design and planning of a multi-period, multi-product closed loop supply chain, where the recovered products are end-of-life products that are disassembled and recycled. Uncertainty is explicitly modelled by considering customers’ demands and returns to be stochastic. A two–stage model is developed where first stage decisions concern the facility location while second stage decisions are the production planning of the supply chain. The integer L- shaped method was adopted as the solution tool and computational tests were performed on multi-period and multi-commodity networks randomly generated based on a reference case. A comparison between the proposed solution method and the straight use of the CPLEX is performed.