Int J Adv Manuf Technol (2017) 90:1507–1528
DOI 10.1007/s00170-016-9459-6
ORIGINAL ARTICLE
Robust aggregate production planning in a green supply chain
under uncertainty considering reverse logistics: a case study
Arezoo Entezaminia 1 & Mahdi Heidari 1 & Donya Rahmani 2
Received: 16 June 2016 / Accepted: 6 September 2016 / Published online: 27 September 2016
# Springer-Verlag London 2016
Abstract In response to the environmental problems in the
world, organizations need to apply green indicators to gain
competitive advantages. Moreover, manufacturers need to ful-
fill the demands in such a way as to generate a stable plan in
the real world. In this paper, a robust optimization approach is
developed to solve a multi-site, multi- period, multi-product
aggregate production planning problem in a green supply
chain considering potential collection and recycling centers
under uncertainty. The specific number of collection and
recycling centers among potential centers can be constructed
to manufacture the second-class products. Some green princi-
ples such as waste management, greenhouse gas emissions
related to transportation modes, and production methods are
embedded in the model. The objective function sets out to
minimize total losses of considered supply chain. Demand
fluctuations and cost parameters are subject to the uncertainty.
A set of discrete scenarios are employed to illustrate the un-
certainties. The robust optimization approach is chosen to re-
duce the impacts of fluctuations of uncertain parameters
concerning all possible scenarios in the future. A case study
from an Iranian Wood and Paper Industries Company is stud-
ied to indicate the practicability of the proposed model. The
* Arezoo Entezaminia
a_entezaminia@alumni.iust.ac.ir
Mahdi Heidari
Mheydari@iust.ac.ir
Donya Rahmani
drahmani@kntu.ac.ir
1
Department of Industrial Engineering, Iran University of Science and
Technology, Tehran, Iran
2
Department of Industrial Engineering, K. N. Toosi University,
Tehran, Iran
computational results demonstrate the effectiveness and ro-
bustness of the model. The cost analysis is carried out to
provide useful managerial insights. The total costs and the
profit in collection and recycling system, is also analyzed to
indicate its performance.
Keywords Aggregate production planning . Green supply
chain management . Reserve logistics . Uncertainty . Robust
optimization
1 Introduction
Nowadays, there has been an increasing awareness in the issue
of world’s environmental problems including air pollution,
climate changing, global warming, and decreasing in the
non-renewable resources. In the face of such thread, consid-
erable attempts have been made to determine how green sup-
ply chain management (GSCM) has any role to play in con-
trolling pollution and preserving natural resources. In last few
years, there has been a growing interest in GSCM models (see,
e.g., [1–13]). At the same time, as regards the significance of
environmental performance, green principles have been
adopted in several organizations [14]. Green supply chain
management has been featured as a set of environmental man-
agement principles which could be utilized to taken into ac-
count environmental considerations in the forward and reverse
logistics process [15–18]. GSCM can be defined as “integrat-
ing environmental thinking into supply chain management,
including product design, material sourcing and selection,
manufacturing processes, delivery of the final products to
the consumers, and end-of-life management of the product
after its useful life” [19]. A wide range of research on
GSCM from more than 500 papers have been reviewed by
Min and Kim [20].
1508
In recent years, the concepts of green logistics and reverse
logistics have become a central issue in green supply chain
management [19]. In the literature review of green logistics
reported by Dekker, Bloemhof [21], it has been stressed that in
regard to environment issues, transportation plays an essential
part in supply chains. As for transportation, four choices in
operation research models, namely mode choice, equipment
choice, fuel choice as well as the intermodal transport have
been taken into account. Each transportation mode enjoys
different cost, accessibility, transit time, and environmental
performance. In the present study, mode choice is used to
incorporate the environmental considerations into the model.
Reverse logistics process makes effort to get the products
back, from their final destinations to the suppliers, after use,
for the purpose of remanufacturing, or proper disposal.
Nowadays, RL is of strategic importance for organizations.
Efficient RL, as an important component of GSCM, can pro-
vide competitive advantage and social image (see, e.g.,
[22–27]). Taking everything into consideration, the potential
collection and recycling centers are considered in our pro-
posed model to collect products from demand points and re-
cycle them as the second-class products, after separating the
recyclable ones.
What is beyond question is that one of the prominent prob-
lems that need to be addressed in green supply chain manage-
ment is aggregate production planning (APP). The purpose of
APP is to determine the optimal quantity of production, in-
ventory as well as workforce levels to meet the demand for
available resources and capacities during a planning horizon,
in advance of 3 to 18 months [28, 29]. Researchers have
shown an increased interest in APP problems from several
years ago (see, e.g., [30–36]). Nam and Logendran [37] pre-
sented a literature review of the studies on the APP models
consist of 140 journal articles and 14 books.
As aggregate production planning in many real-world
problems draw on some critical parameters such as cost, de-
mand, price, and capacity with uncertain values, it is worth-
while to focus on the way in which uncertainty effects the
planning process. A variety of approaches have been proposed
to address various forms of uncertainty. Stochastic approaches
were used in production planning models to consider some
parameters as random variables with determined probability
distributions [38]. In fuzzy approach, variables have been con-
sidered as fuzzy numbers to embed uncertainty in manufactur-
ing systems [39]. Robust optimization was extensively used in
production planning models considering various scenarios
which illustrate the uncertainty of parameters. This strong
and efficient technique generates stable solutions in response
to any changes in uncertain parameters [40].
The concept of stochastic robust optimization was present-
ed by M. Mulvey and Vanderbei [40]. C. H. Leung and Wu
[41] took an aggregate production planning into consideration
with uncertain parameters. They proposed a robust
Int J Adv Manuf Technol (2017) 90:1507–1528
optimization model and considered the tradeoff between ex-
pected cost and its variability. C.H. Leung, O.S. Tsang [42]
developed a robust optimization model to deal with a multi-
site APP problem. In their research, a robust model was pro-
posed to make a production plan for perishable products in an
uncertain manufacturing environment. Kazemi Zanjani, Ait-
Kadi [43] took into account two robust optimization models
with variability of one form or another for a multi-product,
multi-period production planning problem considering the un-
certainty in the quantity of materials. Pan and Nagi [44] fo-
cused on optimization of production and logistics costs related
to supply chin entities. A robust model was formulated to
handle the uncertain demand. Niknamfar and colleagues
[45] presented a mathematical model for a multi-period
multi-product production-distribution problem in a three-
level supply chain. Mirzapour Al-E-Hashem et al. [46, 47]
presented multi-site APP problems in an uncertain environ-
ment. Multi-objective robust optimization models were pro-
posed for the considered problems.
In reviewing the literature, far too little attention has been
paid to adopting green concepts in APP problems under un-
certainty. The first study of multi-site APP models in a green
supply chain under uncertainty is presented by Mirzapour Al-
e-hashem, Baboli [48]. Some green indicators including
greenhouse gas (GHG) emissions arising from transportations
and waste management are embedded in their proposed mod-
el. This study sets out with the aim of dealing with a multi-
period multi-product multi-site aggregate production system
in a green supply chain considering collection and recycling
centers. A mixed-integer programming model is proposed to
minimize the total costs. Finally, using robust optimization
approach, a case study is used to validate the efficiency and
effectiveness of the proposed model.
The major contributions of this study that differentiate it in
the related literature can be summarized as follows:
Production method:
& Apart from waste management, greenhouse gas emissions
related to transportation, multiple production methods are
considered to adopt green principles in the model. It is
assumed that the level of greenhouse emission related to
differing production methods is varied and it is limited by
a specific level.
& Some potential collection and recycling centers are taken
into consideration in order to collecting and recycling re-
cyclable returned products and producing the second-class
products. The quantity of products that will be returned to
customers’ zones are considered to be determined in ad-
vance. It can be identified by forecasting methods based
on information available in the previous periods. The frac-
tion of returned products will be transported to collection
centers and those are not collected will be penalized by the
penalty costs. After identifying recyclable products in
Int J Adv Manuf Technol (2017) 90:1507–1528 1509

each collection center, they will be transported to
recycling centers. Moreover, the recycled products are
supplied to the demand points as the second-class
products.
& To the best of our knowledge, the present study is among
the first attempts to embed the concepts of green and re-
verse logistics in aggregate production planning under un-
certainty. A set of discrete scenarios are considered to
illustrate the uncertainty of customer demands, procure-
ment costs, production costs, inventory costs, shortage
costs, opening costs of collection and recycling centers,
handling costs in collection centers, as well as recycling
costs. A robust optimization model is presented to make
stable production and recycling plans that shows less sen-
sitivity to the fluctuation of input data.
deterministic. Band C,the coefficient matrixes of control con-
straint, are random and subject to noise. eis the right-hand side
vector.
In robust optimization model, a finite set of scenarios
Ω = {1, 2, ... , ξ} is considered to model uncertain parameters.
The subset { dξ; Bξ; Cξ; eξ} represents the uncertain parameters
under the scenarioξ. pξ is the probability of scenarioξ and
∑ξ pξ ¼ 1. The infeasibility of the model is denoted by δξ for
each scenario. On condition that the model is feasible,δξ will
be equal to 0.The scenario based robust optimization model is
formulated as follows:



Min σ x; y1 ; y2 ; :::; yξ þ ωρ δ1 ; δ2 ; :::; δξ ð5Þ
subject to

The remainder of the paper is organized as follows: Ax ¼ b; ð6Þ

Section 2 is devoted to the background of robust optimization
formulation. The problem description and the model formula- Bξ x þ C ξ yξ þ δξ ¼ eξ ; ∀ξ∈Ω; ð7Þ
tion is discussed in Section 3. In Section 4, computational
results, effectiveness, and robustness of the proposed model
are presented by an illustrative example. Finally, the conclu- δξ ≥ 0; yξ ≥ 0; x ≥ 0; ∀ξ∈Ω; ð8Þ
sion is reported in Section 5.
The model is aimed to balance the tradeoff between the
model robustness and the solution robustness presented re-
spectively by the first and the second terms. f(x, y)is a benefit
2 Framework of robust optimization model
or cost function and ψ is used to denote it. For each scenarioξ,
ψξ = f(x, yξ). A large variance in ψξleads to a high-risk solution.
The framework of robust optimization introduced by M.
M. Mulvey and Vanderbei [40] proposed the following term to
Mulvey and Vanderbei [40] includes two kinds of robustness
features the solution robustness:
that is solution robustness and model robustness. Solution
robustness means that the solution is almost optimal in all
scenarios for the small changes in parameters. Model solution !2
X X X
means that the solution is close to feasible in all scenarios for σ ð οÞ ¼ pξ ψ ξ þ λ pξ ψ ξ − pξ 0 ψ ξ 0 ð9Þ
the small changes in input data. Both solution and model ξ∈Ω ξ∈Ω ξ0 ∈Ω
robustness is penalized by a penalty function. It would be
better to say that the stochastic programming is extended by The weight of solution variance is denoted byλ. It is clear
robust optimization approach considering cost variability in- that Eq. (9) is of a quadratic term. An absolute deviation pro-
stead of the expected cost minimization objective. The prima- posed by Yu and Li [49] instead of the quadratic term is as
ry robust optimization LP model is briefly described as fol- follows:
lows [44]:
 
Min cT x þ d T y ð1Þ X X  X 

σ ð οÞ ¼ pξ ψ ξ þ λ pξ  ψ ξ − pξ0 ψξ0  ð10Þ
ξ∈Ω ξ∈Ω
 ξ0 ∈Ω

subject to

Ax ¼ b; ð2Þ
Bx þ Cy ¼ e; ð3Þ Equation (10) is a nonlinear objective function. C.H.
Leung, O.S. Tsang [42] converted the problem to a linear
x; y ≥ 0; ð4Þ model by developing two deviational non-negative variables.
Equation (10) is reformulated in the following way:
where xrepresents the vector of decision variables and y shows
" ! #
that of control variables. The structural and control constraints X X X
are respectively shown in constraints (2) and (3). A, the coef- Min pξ ψ ξ þ λ pξ ψ ξ − pξ0 ψξ0 þ 2θξ ð11Þ
ficient matrix of structural constraint, is free of noise and ξ∈Ω ξ∈Ω ξ0 ∈Ω
1510 Int J Adv Manuf Technol (2017) 90:1507–1528

X
ψξ − pξ ψξ þ θξ ≥ 0; ∀ξ∈Ω; ð12Þ method. It is assumed that only one raw can be used to
ξ∈Ω produce each product. Each plant is featured by its inven-
tory and production capacities. Production costs in differ-
θξ ≥ 0; ∀ξ∈Ω; ð13Þ ing plants and procurement costs in differing suppliers
and can be different. Moreover, plants are capable of pro-
Broadly, the objective function can be shown as follows in ducing the products in both regular and over time. It is
whichρ(δ1, δ2, ... , δξ) is considered to penalize the violation of supposed that, each collection center is characterized by
control constraints as a penalty function. The tradeoff between its opening cost, handling cost and minimum service lev-
the model and solution robustness is modeled by the weightω. el. Furthermore, there are some potential recycling centers
with differing opening and recycling costs. All entities of
" ! # supply chain including suppliers, plants, customer’s
X X X
Min pξ ψ ξ þ λ pξ ψξ − pξ 0 ψ ξ 0 þ 2θξ zones, collection centers, and recycling centers are geo-
ξ∈Ω ξ∈Ω ξ0 ∈Ω graphically scattered. So, transportation cost may be dif-
X ferent from one site to the other sites. The unit transpor-
þω pξ δ ξ : ð14Þ tation cost determines based on the vehicle type that need
ξ∈Ω to be selected among available vehicle types. It is possible
to store the first-class products in each factory. In the
same way, it is possible to store the second-class products
in each recycling center. Customers are able to store the
3 Model description first-class and the second-class products.
Taking everything into account, the related decisions
In this section, the proposed multi-product multi-site multi- consist of: (1) identifying the quantity of product type n
period aggregate production planning problem in a green sup- manufactured at plant j in regular and over time to fulfill
ply chain considering collection and recycling centers can be the demand of demand point i in each period; (2) deter-
described as follows: mining the amount of raw material n provided by supplier
As can be seen from Fig. 1, the supply chain under k to fulfill the requirements of factory j regarding lead
consideration in this study consists of particular sites, in- times; (3) determining the amount of returned product n
cluding suppliers, factories (plants), customers, collection recycled at recycling center j to meet the demand of de-
and recycling centers. We grouped some products into N mand point i in each period; (4) identifying the potential
product families and called them products (indexed by n) collection and recycling centers that need to be opened;
in this paper. The proposed mathematical model considers (5) identifying the number of fired and hired workers in
a set of K suppliers (indexed by k), a set of J plants each time period; (6) identifying the quantity of product n
(indexed by j), a set of I customers (indexed by i), a set that should be stored in factory j, customer i and recycle
of C collection centers (indexed by c), and a set of R center r in each period of time; (7) specifying the mode of
recycling centers (indexed by r), a time horizon of T pe- the transportation utilized for shipping the products; (8)
riods (indexed by t). Moreover, there are G (indexed by g) identifying the quantity of demand that fails to be fulfilled
transportation mode and L (indexed by l) production at each demand point in each period. It is worth noting

Fig. 1 The structure of the

concerned supply chain
Int J Adv Manuf Technol (2017) 90:1507–1528 1511

that the objective of the problem is to minimize the total d4cr The distance between collection center c and recycling center r
losses of supply chain. d5ri The distance between recycling center r and demand point i
P1ni Sale price of the first-class product n in customer zone i
P2ni Sale price of the second-class product n in customer zone i
3.1 Notations
AFnjl Greenhouse gas emission associated with manufacturing the
first-class product n at factory j by production method l
ALjt Allowed greenhouse gas emission related to production in plant
j in each period of time
Parameters Snit The amount of returned product n from demand point i in each
period of time
D1nit Demand for the first-class product n in customer zone i in pe- ηc Construction cost for each collection center
riod of time t
CCc Unit handling cost at each collection center
D2nit Demand for the first-class product n in customer zone i in pe-
Ci Penalty cost per unit of uncollected returned product from
riod of time t
customer zone i
anjl Manpower to manufacture each unit of product n in factory j by
RCnr Unit recycling cost of returned product n at recycling center r
the method l
νn The volume of per unit product n (m3)
α Allowed fraction of overtime
Vg Capacity of vehicle type g
LT1kjg The lead time needed to transport the raw material from supplier
k to factory j via vehicle type g GHGg CO2 emissions of per distance unit for transportation mode g
LT2jig The lead time needed to transport the first-class product from AG1jt Allowed greenhouse gas emission of transportation related to
plant j to customer zone i via vehicle type g factory j in each period
LT3crg The lead time needed to transport the returned product from AG2t Allowed greenhouse gas emission of transportation related to
collection center c to recycling center r via vehicle type g collection and recycling centers in each period of time
LT4rig The lead time needed to transport the second-class product from WTj Allowed amount of waste produced in each factory
recycling center r to customer zone i via vehicle type g WPnjl Waste percentage of product n manufactured at factory j by
CAPPj Storage capacity in plant j method l
CAPDi Storage capacity in demand point i β Recyclable percentage of returned products
CAPRr Storage capacity in recycling center r ECr Construction cost for recycling center r
YRMnr Maximum production of the second-class product n in recycling ωc Maximum capacity of collection center c
center r NC Maximum number of collection centers that can be opened
XRMnjl Maximum production of the first-class product n at factory j by NR Maximum number of recycling centers that can be opened
method l in regular time λ Minimum service level in each collection center
XOMnjl Maximum production of the first-class product n at factory j by πfni Storage cost of the first-class product n in customer zone i
method l in overtime
πsni Storage cost of the second-class product n at customer zone i
CSnk The number of product n provided by supplier k in each period
Continuous variables
wn Maximum shortage fraction of product n
YRnrt The amount of the second-class product n produced at recycling
CRnjl Variable production cost of product n at plant j by method l in center r in period of time t
regular time
XRnjlt The quantity of the first-class product n produced at plant j by
COnjl Variable production cost of product n at plant j by method l in production method l in regular time of period t
overtime
XOnjlt The quantity t of the second-class product n produced at plant j
PCnjl Fixed production cost of product n at plant j by method l by production method l in overtime of period t
LCj Labor cost in plant j XTnkjgt The amount of product n from supplier k to plant j by vehicle
FCj Firing cost in factory j type g in time period t
HCj Hiring cost in factory j YTnjigt The amount of product n from plant j to demand point i by
CIPnj Inventory holding cost for the first-class product n at plant j vehicle type g in time period t
CIDni Inventory holding cost for product n in the first and second class ZTnicgt The amount of product n from customer zone i to collection
at demand point i center c by vehicle type g in time period t
CIRnr Inventory holding cost for the second-class product n at RTncrgt The amount of product n from collection center c to recycling
recycling center r center r by vehicle type g in time period t
VTCg Variable transportation cost of mode g PTnrigt The amount of product n from recycling center r to demand
point i by vehicle type g in time period t
FTCg Fixed transportation cost of chosen mode g
XVkjgt The amount of transportation mode g required for transportation
CMnk Procurement cost of product n that can be provided by supplier
between supplier k and factory j in period t
k
YVjigt The amount of transportation mode g required for transportation
d1kj The distance between the supplier k and factory j
between factory j and demand point i in period t
d2ji The distance between the plant j and customer zone i
ZVicgt The amount of transportation mode g required for transportation
d3ic The distance between customer zone i and collection center c between demand point i and collection center c in period t
1512 Int J Adv Manuf Technol (2017) 90:1507–1528

RVcrgt The amount of transportation mode g required for transportation bsnit Shortage of the second-class product n at demand point i in
between collection center c and recycling center r in period t period t
PVrigt The amount of transportation mode g required for transportation Binary variables
between recycling center r and demand point i in period t Ynjlt 1 if product n produced at factory j by method l in period t; 0
FWjt Number of fired workers at plant j in period t otherwise.
HWjt Number of hired workers at plant j in period t Znjl 1 if product n produced at factory j by method l; 0 otherwise.
AWjt Available workers at plant j in period t Rc 1 if collection center c is opened; 0 otherwise.
IPnjt Inventory of the first-class product n at the end of period t at Xr 1 if recycling center r is opened; 0 otherwise.
plant j
ID1nit Inventory of the first-class product n in demand point i at the
end of period t
ID2nit Inventory of the second-class product n in demand point i at the 3.2 Problem formulation
end of period t
IRnrt Inventory of the second-class product n at recycling center r at The multi-objective multi-period multi-product multi-site ag-
the end of period t gregate production planning model can be formulated as
bfnit Shortage of the first-class product n at demand point i in period t follows:

!
X X X X
MinTC ¼ PCnjl  Z njl þ CRnjl  XRnjlt þ COnjl  XOnjlt þ CMnk  XTnkjgt
n; j;l n; j;l;t n; j;l;t
! n;k; j;g;t
X X X
þ LC j  AW jt þ FC j  W jt þ HC j  HWjt
j;t j;t j;t
!
X X  X
þ IPnjt CIPnj þ ID1nit þ ID2nit  CIDni þ IRnrt  CIRnr
n; j;t n;i;t n; j 0 ;t
X   X
þ FTCg  XVkjgt þ YVjigt þ ZVicgt þ RVcrgt þ PVrigt þ VTCg  d1kj  XVkjgt ð1Þ
k; j;i;c;r;g;t k; j;g;t
!
X X X X
þ VTCg  d2ji  Y Vjigt þ VTCg  d3ic  ZVicgt þ VTCg  d4cr  RVcrgt þ VTCg  d5ri  PVrigt
i; j;g;t i;c;g;t
! c;r;g;t r;i;g;t
X X X X
þ ZTnicgt CCc þ η c  Rc þ RCnr  YRnrt þ X r  ECr
i:c;g;t c n;r;t
! r !
X X X X X
þ ðπf ni  bf nit þ πsni  bsnit Þ þ C i S nit − ZTnicgt − P1ni  YTnjigt þ P2ni  PTnrigt
i;n;t i;c;n;t;g g;c n;i; j;g;t n;i;r;g;t

Subject to bsnit ≤ wn  D2nit ∀n; i; t ð10Þ

X X AWjt ¼ AW jðt−1Þ þ HWjt −FWjt ∀ j; t ð11Þ
IPnjðt−1Þ þ XTnkjgðt−LT kjg Þ − YTnjigt ¼ IPnjt ∀n; j; t ð2Þ X
anjl  XOnjlt ≤ α  Ljt ∀ j; t ð12Þ
k;g i;g
X
ID1niðt−1Þ þ YTnjigðt−LT jig Þ −D1nit −bf niðt−1Þ ¼ ID1nit −bf nit ∀n; i; t ð3Þ n;l
j;g X
X anjl  XRnjlt ≤ Ljt ∀ j; t ð13Þ
ID2niðt−1Þ þ PTnrigðt−LT rig Þ −D2nit −bsniðt−1Þ ¼ ID2nit −bsnit ∀n; i; t ð4Þ n;l
r;g
X X
X
IRnrðt−1Þ þ RTncrgðt−LT crg Þ − PTnrigt ¼ IRnrt ∀n; r; t ð5Þ XTnkjgt ≤ CSnk ∀n; k; t ð14Þ
c;g i;g j;g
X X

IPnjt ≤ CAPP j ∀ j; t ð6Þ XRnjlt þ XOnjlt  WPnjl ≤ WT j ∀ j ð15Þ
n n;t;l
X X
X XVkjgt  GHGg  d1kj YVjigt  GHGg  d2ji ≤ AG1jt ∀j; t ð16Þ
ðID1nit þ ID2nit Þ≤ CAPDi ∀i; t ð7Þ k;g i;g

n þ
X X X
ZVicgt  GHGg  d3ic þ RVcrgt  GHGg  d4cr
IRnrt ≤ CAPRr ∀r; t ð8Þ i;c;g c;r;g
n X
bf nit ≤ wn  D1nit ∀n; i; t ð9Þ þ PVrigt  GHGg  d5ri ≤ AG2t ∀t ð17Þ
r;i;g
Int J Adv Manuf Technol (2017) 90:1507–1528 1513

X

 X
XRnjlt þ XOnjlt  AFnjl ≤ALjt ∀ j; t ð18Þ RVcrgt −1  V g ≤ νn  RTncrgt ≤ RVcrgt
n;l n

XRnjlt ≤ XRMnjl  Y njlt ∀n; j; l; t ð19Þ  V g ∀c; r; g; t ð29Þ

XOnjlt ≤ XOMnjl  Y njlt ∀n; j; l; t ð20Þ
 X
PVrigt −1  V g ≤ νn  PTnrigt ≤ PVrigt
YRnrt ≤ YRMnr ∀n; r; t ð21Þ n

X  V g ∀r; i; g; t ð30Þ
XRnjlt þ XOnjlt ≤ XTnkjgðt−LT kjg Þ ∀n; j; l; t ð22Þ
k;g
X
PTnrigt ≤ YRnrt ∀r; n; t ð31Þ
X i;g
YTnjigt ≤ XRnjlt þ XOnjlt ∀n; j; l; t ð23Þ
i;g
X
YRnrt ≤ RTncrgðt−LT crg Þ ∀r; n; t ð32Þ
Y njlt
 c;g
≤ XRnjlt þ XOnjlt ≤ Y njlt  M ∀n; j; l; t ð24Þ X
M
X YRnrt ≤ M  X r ∀r ð33Þ
Y njlt ≤ MZnjl ∀n; j; l ð25Þ n;t
t X X

 X ZTnicgt ≥ β RTncrgt ð34Þ
XVkjgt −1  V g ≤ νn  XTnkjgt ≤ XVkjgt n;i;c;g;t n;c;r;g;t
n X
ZTnicgt ≤ ωc  Rc ∀c ð35Þ
 V g ∀k; j; g; t ð26Þ n;i;g;t

 X X
YVjigt −1  V g ≤ νn  YTnjigt ≤ YVjigt ZTnicgt ≥ λ  S nit ∀n; i; t ð36Þ
n g;c

 V g ∀ j; i; g; t ð27Þ X
1≤ Rc ≤ NC ð37Þ

 X c
ZVicgt −1  V g ≤ νn  ZTnicgt ≤ ZVicgt
n X
1≤ xr ≤ N R ð38Þ
 V g ∀i; c; g; t ð28Þ r

YRnrt ; XRnjlt ; XOnjlt ; bf nit ; bsnit ; XTnkjgt ; YTnjigt ; ZTnicgt ; RTncrgt ; PTnrit ; IPnjt ; ID1nit ; ID2nit ; IRnrt ≥ 0 ð39Þ

FWjt ; HWjt ; AWjt ; XVkjgt ; YVjigt ; ZVicgt ; RVcrgt ; PVrigt integer Y njlt ; Z njl ; Rc ; X r ∈f0; 1g ð40Þ

The objective function (1) seeks to minimize the total
cost of the supply chain. The first term of this objective
function includes of procurement cost and production
cost which is related to the regular time and overtime
production. The second term is total human resources
cost such as salary, hiring and firing cost. The third
term is total inventory cost in plants, customer zones
and recycling centers. Transportation cost between
entities of considered supply chain is shown in the
fourth term. The fifth term is opening cost of
collection centers and handling cost in collection
centers. The sixth term is opening cost and recycling
cost in recycling centers. The seventh, eighth, ninth
terms respectively are shortage cost and penalty costs
of uncollected returned products from demand points
minus revenues.
Constraint (2) is the inventory balance equation for
the first-class products at the end of each period in
factory j. Constraints (3) and (4) respectively are the
inventory balance equations for the first-class and the
1514
second-class products at the end of each period in de-
mand point i. Constraint (5) is also the balance equation
at the end of each period for the second-class product
inventory in recycling center r. The inventories at plant
j, custom zone i and recycling center r are limited by
the upper bounds of inventory capacity Constraints
(6)–(8). The shortage of the first-class and the second-
class products are limited to maximum specific levels in
customer zone i by constraints (9) and (10). Constraint
(11) is related to the available workforce in each period
of time. The upper bounds of regular and over time at
each factory are shown by constraints (12) and (13).
Constraint (14) ensures that the amount of
transportations from each supplier should not exceed
its capacity. The quantity of waste produced at each
plant is limited to an allowed level by constraint (15).
Constraints (16)–(18) imply that the GHG emissions
arising from the production methods and transportation
are restricted to a specific predetermined level.
Constraints (19) and (20) restrict the number of the
first-class products manufactured in regular and over
time to an allowed level. The number of the second-
class products produced at each recycling center is lim-
ited to a maximum allowed level by constraint (21).
The quantity of the first-class products produced in fac-
tories is restricted to the quantity of raw materials re-
ceived in the current period of time by constraint (22).
Constraint (23) implies that the amount of the first-class
transferred products need to be limited to the amount of
products produced in regular or over time in the current
period of time. Constraint (24) guarantees that if at least
one product is produced in the related factory, binary
variable Y njlt equals 1, and otherwise it equals 0.
Constraint (25) guarantees that if each product is not
assigned to factory j, then it does not need to be pro-
duced at factory j in any time period. Constraints
(26)–(30) determine the number of each vehicle type
required for transportation between different entities of
X

TCðtransportationcostÞ : TFg  XVkjgt þ YVjigt þ ZVicgt þ RVcrgt þ PVrigt þ TVg  d1kj  XVkjgt
k; j;i;c;r;g;t
X X
þ TVg  d2ji  YVjigt þ
i; j;g;t i;c;g;t
X
þ TVg  d5ri  XVrigt
r;i;g;t
Int J Adv Manuf Technol (2017) 90:1507–1528
considered supply chain. The quantity of the second-
class products produced in recycle centers is limited to
the quantity of recyclable products transferred from the
collection centers by constraint (31). Constraint (32)
limits the amount of transferred the second-class prod-
ucts to the amount of products produced in recycling
centers in the current time period. Constraint (33) en-
sures that recycling is possible in each recycling center,
on condition that the related center is opened.
Constraint (34) indicates that only recyclable percentage
of products should be transferred from considered col-
lection centers to be recycled. Constraint (35) is a ca-
pacity restriction for each collection center. The mini-
mum service level needed for each customer zone is
indicated by constraint (36). The number of potential
collection and recycling centers that could be opened
is respectively restricted to the maximum levels, NC
and NR, by constraints (37) and (38). Finally, constraint
(39) determines the type of decision variables.
3.3 The proposed robust optimization model
In this paper, a stochastic robust optimization approach
lied on Mulvey’s model is proposed in which uncertainty
is shown by a set of scenarios (ξ). In the considered aggre-
gate production system, inventory cost, production cost,
shortage cost, collection and recycling cost as well as de-
mand are scenario based uncertain (IC ξ ,PC ξ ,SC ξ ,CC ξ
,RCξ,Dξ). It is assumed that there is no fluctuation in em-
ployee wages and there is no significant change in the price
of fuel during the period under study. So, labor cost and
transportation cost are not scenario based uncertain.
LCðlaborcostÞ
X X X
: SC j  Ljt þ FC j  F jt þ HC j  H jt ð41Þ
j;t j;t j;t
 X
k; j;g;t
X
TVg  d1ic  XVicgt þ TVg  d4cr  RVcrgt
c;r;g;t
ð42Þ
Int J Adv Manuf Technol (2017) 90:1507–1528 1515

X X CCξ ðcollectioncostÞ
ICξ ðinventorycostÞ : I1njt  CI1nj þ I2nit ξ
n; j;t n;i;t X X ξ
 X : ηc ξ  R c þ ZQnicgt  CCc
þ I3nit ξ  CI2ni ξ þ I4nrt c i:c;g;t
n; j0 ;t X  X 
þ C i S nit − ZQnicgt ð46Þ
 CI3nr ð43Þ i;c;n;t;g g;c
X X X
PCnjl ξ  Z njl þ CRnjl ξ  XRnjlt þ COnjl ξ  XOnjlt
PCξ ðproductioncostÞ :
n; j;l n; j;l;t n; j;l;t
X X X
þ CMnk ξ  XQnkjgt − P1ni ξ  YQnjigt − P2ni ξ  PQnrigt
n;k; j;g;t n;i; j;g;t n;i;r;g;t RCξ ðrecyclingcostÞ
ð44Þ X X
: X r  ECr ξ þ RCnr ξ  YRnrt ð47Þ
SCξ ðshortagecostÞ r n;r;t
X 
: π1ni ξ  b1nit ξ þ π2ni ξ  b2nit ξ ð45Þ The developed robust optimization model for mentioned
i;n;t problem can be formulated as follows:

X  
MinðZ 1 Þ ¼ ρξ  LC þ ICξ þ TC þ PCξ þ SCξ þ CCξ þ RCξ
ξ
 
X 
 X  
ξ ξ ξ ξ ξ ξ0 ξ0 ξ0 ξ0 ξ0 
þλ ρξ  LC þ IC þ TC þ PC þ SC þ CC þ RC − ρξ0  LC þ IC þ TC þ PC þ SC þ CC þ RC 
ξ
 ξ0

ð48Þ

subject to The first and the second terms of the objective function
X (48) are respectively the mean value and variance of total
YQnjigðt−LT jig Þ þ I2niðt−1Þ ξ −I2nit ξ þ B1nit ξ −B1niðt−1Þ ξ costs. They are considered to measure the solution
j;g
robustness. ρ ξ is the probability of scenario ξ. In the
¼ D1nit ξ ∀n; i; t; ξ ð49Þ proposed model, inventory and shortage in demand
points are taken into account as control variables. I2nitξ
X
PQnrigðt−LT rig Þ þ I3niðt−1Þ ξ −I3nit ξ þ B2nit ξ −B2niðt−1Þ ξ and I3 n i t ξ take specific value for each scenario.
r;g Constraints (49) and (50), as control constraints, guaran-
tees that the demand in the customer zones will be fulfilled.
¼ D2nit ξ ∀n; i; t; ξ ð50Þ
If ∑ YQnjigðt−LT jig Þ þ I2niðt−1Þ ξ −B1niðt−1Þ ξ ¼ D1nit ξ , the in-
X
 j;g
I2nit ξ þ I3nit ξ ≤ Cap2i ∀i; t; ξ ð51Þ ventory and shortage at period t will be equal to zero. If
n
∑ YQnjigðt−LT jig Þ þ I2niðt−1Þ ξ −B1niðt−1Þ ξ ≥ D1nit ξ , product in-
j;g
B1nit ξ ≤ wn  D1nit ξ ∀n; i; t; ξ ð52Þ ventory will be stored in customer zones at period of time
t for each scenario. If
B2nit ξ ≤ wn  D2nit ξ ∀n; i; t; ξ ð53Þ ξ ξ ξ
∑ YQnjigðt−LT jig Þ þ I2niðt−1Þ −B1niðt−1Þ ≤ D1nit , we will face
j;g
I2nit ξ ; I3nit ξ ; b1nit ξ ; b2nit ξ ≥ 0 ∀ξ ð54Þ a shortage in customer zones at time period t for each
scenario. The objective function (48) is a non-linear
YRnrt ; XRnjlt ; XOnjlt ; XQnkjgt ; YQnjigt ; ZQnicgt ; RQncrgt ; PQnrit ; I1njt ; I4nrt ≥ 0 ð55Þ function. Non-negative variable (θξ) is used to transform
the problem into a linear programming model with lin-
ear objective function as well as linear constraints as
with Constraints (2), (5), (6), (8), (11)–(38), and (40). follows:
1516 Int J Adv Manuf Technol (2017) 90:1507–1528

Fig. 2 Schematic of the Pulp and Papermaking Process [50]

X   X h
MinðZ 1 Þ ¼ ρξ  LC þ ICξ þ TC þ PCξ þ SCξ þ CCξ þ RCξ þ λ1 ρξ LC þ ICξ þ TC þ PCξ þ SCξ
ξ ξ
 X  0 0 0 0 0

þ CCξ þ RCξ − ρξ0  LC þ ICξ þ TC þ PCξ þ SCξ þ CCξ þ RCξ
ξ0
i
 X 
ξ
þ 2θ LC þ ICξ þ TC þ PCξ þ SCξ þ CCξ þ RCξ − ρξ  LC þ ICξ þ TC þ PCξ þ SCξ þ CCξ
ξ

þ RCξ þ θξ ≥0 ∀ξ ð56Þ

 X θξ ≥ 0 ∀ξ ð58Þ
LC þ ICξ þ TC þ PCξ þ SCξ þ CCξ þ RCξ − ρξ
ξ
  4 Computational results
 LC þ ICξ þ TC þ PCξ þ SCξ þ CCξ þ RCξ
In this section, some computational experiments are presented to
þ θξ ≥ 0 ∀ξ ð57Þ evaluate the effectiveness and robustness of the model. A data set
Int J Adv Manuf Technol (2017) 90:1507–1528
Fig. 3 GHG emission level for different vehicle types
is provided from an Iranian Wood and Paper Industries Company
as a real-world industrial case to illustrate the applicability of
proposed robust optimization model to practical problems.
4.1 Case description
In order to show the efficiency of the proposed robust pro-
gramming model for the considered supply chain, a set of data
1517
provided by Iranian Wood and Paper Industries Company are
used. The pulp and paper industry converts fibrous raw mate-
rial into pulp, paper. The processes involved in papermaking
include raw material preparation, pulping (chemical, mechan-
ical), bleaching, chemical recovery, pulp drying, and paper-
making. A flow diagram of the processes is shown in Fig. 2.
The most significant energy-consuming processes are pulping
and the drying section of papermaking.
1518 Int J Adv Manuf Technol (2017) 90:1507–1528

Table 1 Demand forecast for the first-class products under scenario 1 Table 3 Purchasing cost under different scenarios (in dollar per unit)
(units)
CM
Customer 1 Customer 2
Scenario 1 Scenario 2 Scenario 3
Period Period
Supplier Supplier Supplier
1 2 3 4 1 2 3 4
1 2 3 1 2 3 1 2 3
Product 1 380 340 320 400 360 570 380 320
2 450 390 460 360 470 480 480 410 Product 1 15 16 10 12 10 14.2 14 12.8 16.4
3 320 340 450 430 450 420 460 460 2 12.5 12 11 13 14.2 12 12 16.4 14
4 350 430 450 440 350 530 370 390 3 10 15 12.5 16 13.1 10.9 11.6 15.2 12.8
5 300 540 320 530 450 270 530 430 4 15.8 18 13 12 16.8 15.3 10.4 11.6 17.6
5 13 17.5 12.5 10 12 14.2 12.8 14 16.4
For scenarios 2 and 3, the estimations are multiplied by 1.05 and 1.1,
respectively

Five end products are considered to be provided for cus-

through the country and also near the woods. There
tomers as follows:
are respectively three vehicle type including trailer,
heavy truck and semi-trailer for transportation. Each
1. Printing and writing typical specifications 50–60 g/m2
transportation mode is of its specific level of green-
2. Printing and writing typical specifications 70–80 g/m2
house gas emission. Figure 3 taken from the website
3. Flutingtypicalspecifications113–127 g/m2
o f N T M t h a t i s “ N e t w o r k f o r Tr a n s p o r t a n d
4. Flutingtypicalspecifications140–150 g/m2
Environment” [51] demonstrates the GHG emission lev-
5. Flutingtypicalspecifications160–175 g/m2
el for differing vehicle types based on their capacity
[48].
A 4-month planning horizon is taken into consider-
Two pulping methods are used in papermaking pro-
ation. There are two production factories to meet the
cess including chemical and mechanical pulping. The
demand of considered customer zones. There are three
principle behind the mechanical pulping is to take the
suppliers, two potential collection centers as well as
raw material and grind it down into individual fibers.
three potential recycling centers in the corresponding
Method 1, that is Mechanical pulping, has the advantage
supply chain. As mentioned before, it is assumed that
of producing much higher yields than chemical pulping.
the quantity of products that will be returned to cus-
Recently, a variety of high quality papers can be made
tomers’ zones are considered to be determined in ad-
from the mechanical pulp. However, method 2, i.e.,
vance. Expert opinions are used to determine the open-
chemical processes have a low yield, the pulp produced
ing, collecting and recycling costs. Each plant is located
has high quality. The selection of one pulping method
near the suppliers and customer zones at closest possi-
among the others makes the consumption of energy and
ble distance. Suppliers are geographically scattered
fuel vary. Each pulping method leads to different level
of greenhouse gas emission which is considered in the
Table 2 Demand forecast for the second-class products under scenario proposed model. Carbon Dioxide emissions from energy
1 (units) use are measured by determining the electricity, steam
used, and their specific energy consumption in the
Customer 1 Customer 2
pulping (see for example [50]). Moreover, in recycling
Period Period system, to make the low quality papers as the second-
class products from returned items, mechanical pulping
1 2 3 4 1 2 3 4 is utilized.
Allowed greenhouse gas emissions of transportation
Product 1 210 190 200 150 200 170 130 210
and production are obtain from cap and trade GHG
2 100 160 200 150 210 145 170 130
emissions policy from the government aimed at reduc-
3 200 200 140 210 210 170 200 220
ing GHG emissions. Cap and trade is a systemic envi-
4 160 120 220 200 180 175 205 190
ronmental tool that sets an overall emissions limit, allo-
5 140 210 200 210 205 210 200 200
cates emissions allowances to participants, and allows
For scenarios 2 and 3, the estimations are multiplied by 1.05 and 1.1, them to trade emissions credits with each other [52].
respectively Total greenhouse gas emissions in Iran in 2010 have
Int J Adv Manuf Technol (2017) 90:1507–1528 1519

Table 4 Variable production cost

in regular time under different CR
scenarios (in dollar per unit)
Scenario 1 Scenario 2 Scenario 3

Plant 1 Plant 2 Plant 1 Plant 2 Plant 1 Plant 2

Method Method Method

1 2 1 2 1 2 1 2 1 2 1 2

Product 1 18 15.3 12.8 16 19 15.3 12.6 16 18.8 15.2 12.7 16.2

2 16.5 12.7 19.5 14.9 16.5 12.7 19.5 14.9 16.6 12.6 19.4 15
3 18.5 16 14.2 13.5 19 16 14.1 13.5 18.8 16.2 14.2 13.2
4 19 16.2 12.6 13.5 19 16 12.6 13.5 18.8 16.2 12.7 13.2
5 16.3 13.5 19 16 16.3 13.1 19 16 16.2 13 18.8 16.2

Table 5 Variable production cost

in over time under different CO
scenarios (in dollar per unit)
Scenario 1 Scenario 2 Scenario 3

Plant 1 Plant 2 Plant 1 Plant 2 Plant 1 Plant 2

Method Method Method

1 2 1 2 1 2 1 2 1 2 1 2

Product 1 37.5 28.4 24.6 31.2 37.3 28.2 25.5 32 37.2 28 25.4 32.1
2 31.2 25.6 39.2 30.6 31 25.5 39 29.5 29.8 25.8 39.1 29.4
3 38.4 31 27.7 28.2 38.5 29.1 28.4 27.3 38.4 28.7 28.5 27
4 35.4 32 24.6 25.8 35.2 32 25.5 27 35.1 32.1 25.4 26.5
5 33.5 28.4 38.4 32.2 33.1 27.5 38.5 32 32.7 28.3 38.4 32.1

Table 6 Fixed production cost

under different scenarios (in PC
dollar per unit)
Scenario 1 Scenario 2 Scenario 3

Plant 1 Plant 2 Plant 1 Plant 2 Plant 1 Plant 2

Method Method Method

1 2 1 2 1 2 1 2 1 2 1 2

Product 1 210 420 410 520 215 445 400 505 220 440 420 500
2 190 480 520 460 195 475 490 485 180 460 510 470
3 290 390 330 350 275 385 325 355 270 375 320 340
4 340 510 440 340 315 500 410 340 325 515 420 355
5 270 345 350 290 275 315 340 300 270 320 355 295
1520 Int J Adv Manuf Technol (2017) 90:1507–1528

17.4
14.4
16.2

16.2
Table 7 Construction and handling cost of collection centers under

15
2
different scenarios

Scenario 3
η ($) C ($/unit)

14.4
16.8
16.8

16.8
14.4
1
Scenario Scenario

15.95
14.85

13.75
14.85
13.2
1 2 3 1 2 3

2
Scenario 2
Collection center 1 39,000 40,000 41,500 17 15 14

13.2
17.5
15.4

15.4
13.2
2 50,000 45,500 44,000 13 14.5 16

13.5
14.5

12.5
13.5
12
2
Scenario1

Customer
Table 8 Construction cost of each potential recycling center under
different scenarios

15.5
CID

14
12

14
12
1
EC ($)

Scenario

33
32
19
15
15
Price and holding cost of the first and second-class products in customer zones under different scenarios (in dollar per unit)

2
Scenario 3
1 2 3

Recycling center 1 70,000 72,000 71,000

32
35
13
12
14
1
2 62,000 63,200 64,400
3 52,500 53,750 55,000

14.5
14.5
34
35
18
2
Scenario 2
been reported about 88,554,272 tons. About 10 % of

31
34
18
13
16
these emissions are related to the Wood and Paper

1
Industries. According to the plan announced by the gov-
ernment, an emissions reduction target of 3 % is taken

35
33
17
15
14
2
into account for this industry. Based on the cap and
Scenario1

Customer

trade policies, the maximum greenhouse gas emissions

resulting from the production of considered factory for
P2

33
35
17

15
11
1

4 periods are considered to be 152,000 tons. Maximum

G H G e m i s s i o n a r i s i n g f r o m t r an s p o r t at i o n s i s
42
49
23
32
31
2

18,000 tons for each plant in each period. Allowed

GHG emission of transportation related to collection
42
47
22
34
34
Scenario 3

and recycling centers is assumed to be 120,000 tons in

each period. Furthermore, the factory has a waste
41
47
22
33
32
2

Table 9 Recycling cost of each potential recycling center under

Scenario 2

different scenarios (in dollar per unit)

RC
44
48
23
33
35
1

Scenario 1 Scenario 2 Scenario 3

45
47
33
32
28

Recycling center Recycling center Recycling center

2
Scenario 1

Customer

1 2 3 1 2 3 3 3
P1

43
47
32
31
29
1

Product 1 8.5 9.5 13 8 11.5 10 10.5 11

2 11 12 11 12 13 11 13 11
1
2
3
4
5

3 13 8 10.5 8 9.5 9 9 9.5

Table 10

4 10 9 8 11 9 9.5 8.5 10
Product

5 8.2 8 10 8 8 11 8 11.5
Int J Adv Manuf Technol (2017) 90:1507–1528 1521

Table 11 Inventory cost in plants (in dollar per unit) shown in Tables 7, 8, and 9. Table 10 presents the price
Product and holding cost of the first and second-class products
1 2 3 4 5 in customer zones under different scenarios. Inventory
cost in plants and recycling centers, as well as shortage
Plant 1 12.0 12.5 13.5 13.0 14.5 cost are given in Tables 11, 12, and 13. The quantity of
2 11.5 12.5 12.0 14.0 12.0 each product provided by suppliers in each period is
presented in Table 14. Inventory capacity of each
recycling center and maximum capacity of collection
centers are presented in Tables 15 and 16. Table 17
Table 12 Inventory cost shows the salary, firing, and hiring cost and inventory
in potential recycling CIR
capacity in each plant. Penalty cost and inventory ca-
centers (in dollar per
unit) Recycling center pacity in demand point are presented in Table 18.
Transportation cost of each vehicle type and distances
1 2 3 between entities are given in Tables 19, 20, and 21.
Product 1 5.0 4.5 3.5 Waste percentage of production is given in Table 22.
2 6.0 5.0 4.0
Table 23 shows the quantity of returned products in
3 6.5 4.5 4.0
each customer zone. At most two recycling centers can
4 4.0 5.0 3.5
be opened from all potential sites. The lead time re-
quired for transportation from each factory or recycling
5 3.0 2.5 4.0
center to demand points is one period of time.

reduction target of 5 %. So, allowed amount of waste 4.2 Experimental results

produced in factory 1 and 2 are respectively considered
to be 500 and 600 tons.
In the proposed model, a robust optimization ap-
proach as well as scenario-based methodology are
employed. According to expert managers and based on
the condition of cost and demand in future, three sce-
narios are considered including optimistic with related
probability of 0.35, most likely with associated proba-
bility of 0.5, and pessimistic with related probability of
0.15. According to the fluctuations and changes expect-
ed during planning periods, forecasted market demand
of the first-class and the second-class products is pre-
sented in Tables 1 and 2. Procurement costs, variable
and fixed production costs are respectively given in
Tables 3, 4, 5 and 6. Opening and handling costs in
collection centers, opening cost of recycling centers, as
well as recycling costs for each scenario are respectively
All the computations were run using the CPLEX algo-
rithm accessed via IBM ILOG CPLEX 12.4 on a PC
Pentium IV-1.60GHz i7 and 4 GB RAM under Win 7
Ultimate. The resulted solutions based on a set of
above-mentioned data with regard to projection reported
from the company, are presented in Tables 24, 25, 26,
27, 28, 29, 30, and 31. Production plan in regular and
overtime is presented in Tables 24 and 25. It can be
seen from the results that both potential collection cen-
ters and only recycling center 2 are selected to be
opened. Table 26 shows the recycling plan in center 2
in each time period. Interactions between different enti-
ties of the corresponding supply chain are provided in
Tables 27, 28, 29, and 30. Blank cells in tables are
equal to 0. The interactions between suppliers and fac-
tories as well as transportation mode are presented in

Table 13 Shortage cost of the

first and second-class products in πf πs
customers zones under different
scenarios ($/unit) Scenario 1 Scenario 2 Scenario 3 Scenario1 Scenario 2 Scenario 3

Customer Customer

1 2 1 2 1 2 1 2 1 2 1 2

Product 1 150 100 165 110 180 120 130 150 143 165 156 180
2 120 110 132 121 144 132 140 110 154 121 168 132
3 130 120 143 132 156 144 130 150 143 165 156 180
4 140 100 154 110 168 120 120 140 132 154 144 168
5 120 150 132 165 144 180 110 120 121 132 132 144
1522 Int J Adv Manuf Technol (2017) 90:1507–1528

Table 14 The quantity Table 18 Penalty cost

of each product provided CS Supplier and inventory capacity in C ($/unit) CAPD (unit)
by suppliers in each demand point
period (units) 1 2 3 Customer 1 12.5 210
Customer 2 14 225
Product 1 810 700 700
2 830 830 830
3 920 740 650 Table 19 Transportation
4 680 750 780 cost of each vehicle type FTC VTC
5 770 800 840 (in dollar)
Vehicle 1 29,000 36
2 31,500 42
3 32,800 48
Table 15 Inventory
capacity of each CAPR
recycling center (units)
Recycling centers 1 345 outlines the variability in total cost components and the
2 375 profit.
3 350 In order to evaluate the recycling system performance
and efficiency, the total cost and profit of collection and
recycling centers are calculated for each scenario in
Table 27. Product types, supplier and plants served by Table 32. Total cost of this system consists of the con-
relevant supplier are respectively indicated in the first, struction, collecting, recycling, inventory, shortage and
second and third columns. For example, the first row penalty cost of products in the second class. To calcu-
denotes that 396, 363,352, and 240 units of type 1 late the system profit, revenue from the sale of products
products are shipped from supplier 1 to plant 1 at se- in the second class is considered. Furthermore, cost sav-
quential periods 1 to 4 by vehicle type 2. ing is penalties related to uncollected returned products
Interactions between plants and customer zones, cus- from demand points, on condition that organization fails
tomer zones and collection centers, as well as recycling to open collection and recycling centers.
centers and demand points are respectively presented in From Fig. 5, it can be found that the profit earned
Tables 28, 29, and 30 and can be interpreted in from the recycling system respectively covers 34.3,
Table 27. Moreover, components of the objective func- 35.8, and 36.2 % of total cost under scenario 1, 2,
tion under different scenarios are shown in Table 31. As and 3. Moreover, for each scenario, the unpaid penalty
can be seen from the table, levels of total cost compo- arising from uncollected returned products from
nents including purchase cost, shortage cost, transporta-
tion cost, production and inventory cost, workforce cost, Table 20 Distances between collection centers and other related sites
collection and recycling cost, as well as the profit, are (km)
different among considered scenarios. The profit and Recycling center Customer
cost variability makes the decision making more com-
plicated. To make the comparison more precise, Fig. 4 1 2 3 1 2

Collection center 1 200 350 240 220 500

Table 16 Maximum
capacity of collection ω 2 350 330 150 420 400
centers (units)
Collection center 1 7,000
2 9,500
Table 21 Distances between recycling centers/plants and other related
sites (in kilometer)

Customer Supplier
Table 17 Salary, firing and hiring cost and inventory capacity in each
plant 1 2 1 2 3

CAPP HC FC LC Plant 1 250 210 135 320 500

(unit) ($/labor ($/labor ($/labor
2 410 300 200 145 190
day) day) day)
Recycling center 1 220 240 – – –
Plant 1 250 9 14 28 2 125 155 – – –
2 285 11 16 26.5 3 300 350 – – –
Int J Adv Manuf Technol (2017) 90:1507–1528 1523

161
148
136
134
208
Table 22 Waste percentage of production

4
WP

394
250
357
372
416
Plant 1 Plant 2

3
Production method

455
248
383
390
383
2
1 2 1 2

Method 2
Product 1 0.03 0.04 0.01 0.011

436
374
221
411
375
2 0.04 0.05 0.04 0.03

1
3 0.03 0.03 0.03 0.02
4 0.012 0.011 0.02 0.03

154
200
149
140
192
5 0.01 0.02 0.022 0.042

367
302
370
378
428
customer zones as a cost saving covers about 30 % of

3
total cost. It should be noted that considerable part of
total cost is arising from construction of the centers.

428
270
416
396
337
Results indicated in Table 32 and Fig. 5 indicates per-

2
formance and efficiency of the collection and recycling

Method 1
system.

Plant 2

Period

407
396
254
406
329
1
4.2.1 Comparing the effectiveness of robust optimization Regular time assigned in each plant to produce differing the first-class products by different methods
and mean models

130
160
106
106
166
4
In order to demonstrate the robustness of production
and recycling plan obtained from the proposed model,

242
345
406
304
341
3
the expected values of uncertain parameters in the MIP
model are considered as deterministic values. Hereafter,
this model is called the mean value-based model.
253
384
406
376
366
2

Robust optimization has been developed to achieve a

Method 2

robust solution through the exposure of supply chain to

fluctuations of the uncertain parameters. Some parame-
266
428
371
326
432
1

ters are uncertain at the beginning of the planning ho-

rizon, and only during implementation of the program,
their actual value will be determined. Real system mode
164
120
120
164
150
4

with the actual parameters must be considered in exe-

cution time to indicate the robustness of the developed
model [53].
349
420
318
369
262
3

Table 23 Quantity of returned products in each customer zone (units)

338
396
433
394
263

Customer 2 Customer 1
2
Method 1
Plant 1

Period Period
Period

392
282
380
460
296
1

1 2 3 4 1 2 3 4

Product 1 255 260 270 260 220 300 300 240

2
3
4
5
1

2 270 265 300 260 300 255 280 275

3 450 270 280 250 390 250 275 260
Table 24

Products

4 265 270 250 255 260 310 270 290

5 750 290 280 250 630 290 260 320
1524 Int J Adv Manuf Technol (2017) 90:1507–1528

Table 25 Overtime assigned in each plant to manufacture differing the first-class products by different methods

Plant 1 Plant 2

Method 1 Method 2 Method 1 Method 2

Period Period

1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4

Products 1 100 100 90 90 130 110 110 110 128 128 128 108 101 101 101 101
2 164 164 114 114 128 118 118 118 76 126 76 76 148 148 128 128
3 192 99 72 72 103 89 86 86 103 103 103 103 136 136 116 116
4 72 72 72 72 126 126 86 86 108 108 108 108 114 114 114 114
5 104 104 104 104 132 132 132 102 102 132 102 102 86 86 114 86

Along similar lines, some possible scenarios that may oc-

Table 26 Time assigned in each recycling center to produce differing cur after execution of the production and recycling plan in the
the second-class products future are simulated. For uncertain parameters, 15 random
occurrences are considered. Total costs of each scenario are
Recycle center 2
calculated for robust and mean value based models, and the
Period results of these tow considered models are compared with
each other.
1 2 3 4 The total costs of scenarios with probabilities of 0.35,
Product 1 440 380 374 368 0.5, and 0.25 are given in the Table 33 and Fig. 6. As
2 394 374 387 360
shown in Figs. 6, total costs of production and recycling
3 438 426 374 363
4 367 367 425 425 Table 28 Interaction between factories and customers
5 430 438 438 438
Period t

Product n Factories j Customer i 4 3 2 1

1 1 1 240 (1) – 363 (2) 396 (2)
Table 27 Interactions between suppliers and factories 1 1 2 – 352 (2) – –
1 2 1 262 (2) 495 (2) – –
Period t
1 2 2 – – 556 (1) 537 (2)
Product n Supplier k Factory j 1 2 3 4 2 1 1 278 (2) – 502 (2) 473 (2)
1 1 1 396 (2) 363 (2) 352 (2) 240 (2) 2 1 2 – 463 (2) – 83 (3)
1 1 2 – – – 262 (2) 2 2 1 276 (2) 378 (2) – –
1 2 2 357 (2) 556 (3) 495 (1) – 2 2 2 – – 395 (2) 527 (2)
2 1 1 556 (2) 502 (2) 463 (2) 278 (2) 3 1 1 192 (2) – 495 (2) 352 (2)
2 1 2 – – – 276 (2) 3 1 2 – 492 (2) – 122 (1)a
2 2 2 522 (3) 396 (2) 378 (3) – 3 2 1 252 (1) 473 (3) – –
3 1 1 474 (2) 495 (2) 492 (2) 192 (2) 3 2 2 – – 519 (2) 357 (1)
3 1 2 – – – 252 (3)a 4 1 1 192 (2) – 505 (2) 452 (2)
3 2 2 357 (3) 519 (2) 473 (2) – 4 1 2 – 390 (2) – –
4 1 1 452 (2) 505 (2) 390 (2) 192 (1) 4 2 1 248 (2) 486 (2) – –
4 1 2 – – – 248 (2) 4 2 2 – – 504 (2) 525 (2)
4 2 2 525 (2) 504 (2) 486 (2) – 5 1 1 268 (2) – 498 (3) 447 (2)
5 1 1 564 (2) 496 (1) 473 (2) 268 (2) 5 1 2 – 473 (2) – 117 (2)
5 1 2 – – – 294 (2) 5 2 1 294 (2) 530 (1) – –
5 2 2 461 (2) 469 (1) 530 (3) – 5 2 2 – – 469 (2) 461 (2)
a a
It means that 252 units of type 3 product are shipped by vehicle type 3, It means that 122 units of type 3 product are shipped by vehicle type 1,
from supplier 1 to factory 2 during period 4 from factory 1 to customer 2 during period 1
Int J Adv Manuf Technol (2017) 90:1507–1528 1525

5135.96
649,276.6
Table 29 Interactions between customers and collection centers

30 %
652,690
651,770

643,370
Profit
Period t

Product n Customer i Collection 1 2 3 4

28,140.93
center c

2,151,764.8

2,168,885.6

100 %
2,153,528

2,201,364
Total cost
1 1 1 310 (2) 208 (1) 216 (2) 241 (2)
1 2 2 208 (2) 240 (2) 224 (2) 192 (2)
2 1 1 224 (2) 216 (2) 232 (2) 208 (3)
2 2 2 240 (2) 224 (3) 224 (2) 216 (2)

Collection and recycling cost

3 1 1 284 (3)a 302 (2) 200 (2) 220 (2)
3 2 2 232 (2) 200 (2) 240 (2) 208 (2)
4 1 1 224 (2) 236 (2) 284 (2) 192 (2)
4 2 2 208 (1) 264 (2) 216 (3) 308 (2)

22.96 %
5 1 1 271 (2) 300 (2) 316 (1) 316 (3)

2673.16
497,941.6
5 2 2 240 (3) 216 (2) 200 (2) 200 (1)

496,095

501,007
496,723
a
It means that 284 units of type 3 product are shipped by vehicle type 3,
from customer 1 to collection center 1 during period 1

Workforce cost

16.11 %
plan obtained from the proposed model are robust

16,345.89
349,093.3
363,200
352,900
331,180
against the changes in uncertain parameters in the fu-
ture. The robust optimization model is yielded a set of
solutions with less sensitivity against actual realizations
of uncertain input data. It would be better to say the

Production and inventory cost

violation of results provided by the robust model is less
than the mean value based model. As can be seen from
Figs. 6, the total cost of the developed model indicates
that the trend curve of this series is more robust than

32.15 %
that of the mean value based model, under different

697,427.26
2405.59
scenarios. It is worthwhile to note that the proposed 696,040.8
696,036

model is efficient for those systems that solution robust- 700,205

ness is significant in addition to total cost of supply
chain for the managers. In view of this, such systems
Transportation cost

achieving a solution with minimum total cost are not

Components of the objective function under different scenarios

11.57 %
sufficient, but low fluctuation in realistic scenarios in
4907.98
251,120
245,810
255,490

252,060

Table 30 Interactions between recycling centers and customers

Product Recycling Customer Period t

Shortage cost

n center r i
0.79 %
12,213.94

1 2 3 4
17,090
4081
18,877

28,312

1 2 1 210 (2) 192 (2) 221 (3) 158 (1)

1 2 2 230 (2) 188 (2) 153 (2) 210 (2)
2 2 1 163 (2) 203 (2) 199 (3) 207 (2)
16.42 %
Purchase cost

2 2 2 231 (2) 171 (2) 188 (2) 153 (2)

356,213.3
32,385
323,830
356,210
388,600

3 2 1 216 (3) 230 (2) 154 (3) 231 (2)

3 2 2 222 (1) 196 (2) 220 (2) 132 (2)
4 2 1 143 (2) 174 (2) 194 (2) 221 (2)
Standard deviation

4 2 2 224 (2) 193 (2) 231 (2) 204 (1)

215 (3)a
Expected value

5 2 1 186 (3) 225 (1) 221 (2)

5 2 2 244 (2) 213 (3) 223 (2) 217 (2)
Percentage
Table 31

Scenario

a
It means that 215 units of type 5 product are shipped by vehicle type 3,
from recycling center 2 to customer 1 during period 3
1
2
3
1526 Int J Adv Manuf Technol (2017) 90:1507–1528

Table 32 Total cost, profit, and cost saving of the collection and 5 Conclusion
recycling system

Scenario Total cost The profit Cost saving In this paper, a robust optimization model was proposed
of collection of collection for a multi-product multi-period multi-site aggregate
and recycling and recycling production planning problem in a green supply chain
center system
considering a reverse logistic system under uncertainty.
1 496,095 170,181 151,230 The objective function was taken into account to mini-
2 496,723 178,310 151,440 mize total losses of the supply chain including purchas-
3 501,007 181,400 153,100 ing cost, production cost, workforce cost, inventory
cost, shortage cost, transportation cost, collection cost
and recycling cost.
Table 33 Total cost of robust and mean models for the scenarios with The limited number of collection and recycling cen-
probabilities 0.35, 0.5, and 0.25
ters among potential centers taken into account to be
Problem number Robust model Main value based model constructed to produce the second-class products. On
the other hand, in addition to waste management, dif-
1 1,976,100 1,981,900 ferent production methods was taken into consideration
2 1,970,300 1,968,000 and the GHG emission related to each method was lim-
3 1,972,900 1,982,100 ited to a maximum specific level. Furthermore, GHG
4 1,973,700 1,983,700 emissions associated with transportation modes were
5 1,975,500 1,991,100 embedded in the model.
6 1,971,500 1,971,800 In the proposed model, demand fluctuation and some
7 1,972,400 1,977,500 of the cost parameters are subject to the uncertainty. In
8 1,968,400 1,968,700 order to reduce the impacts of changes and fluctuations of
9 1,969,200 1,971,100 uncertain parameters and provide a stable plan, the robust
10 1,970,200 1,983,100 optimization is used and a scenario set is employed to
11 1,971,200 1,989,200 illustrate the uncertainties. The computational results re-
12 1,968,800 1,972,000 lated to a data set from an Iranian Wood and Paper
13 1,966,800 1,967,900 Industries Company demonstrated that the proposed mod-
14 1,972,200 1,982,100 el is more practical to handle the uncertain parameters in
15 1,971,300 1,968,700 the real-world production environment. The effectiveness
and robustness of the model is also indicated. In order to
provide helpful managerial insights, cost analysis is per-
the future is more important. All things considered, nu- formed. Furthermore, total costs and the profit in collec-
merical results indicate the effectiveness of the proposed tion and recycling centers, is analyzed to show the perfor-
robust optimization model. mance of this part of considered supply chain.

Fig. 4 Components of the 500000 701000

Producon and Inventory

700000
objective function under different
Purchasing Cost

400000
699000
scenarios 698000
300000
697000
Cost

200000 696000
100000 695000
694000
0 693000
1 2 3 1 2 3
Scenario Scenario
Collecon and Recycling Cost

502000 654000
501000 652000
500000
650000
499000
648000
Profit

498000
646000
497000
496000 644000
495000 642000
494000 640000
493000 638000
1 2 3 1 2 3
Scenario Scenario
Int J Adv Manuf Technol (2017) 90:1507–1528 1527

Fig. 5 Total cost, profit and cost Total cost, profit and cost saving of collecon Total cost, profit and cost saving of collecon
saving of collection and recycling and recycling system under Scenario 1 and recycling system under Scenario 2
system under different scenarios 600000 600000
500000 500000
400000 400000
300000 300000
151230 496095 151440 496723
200000 200000
100000 170181 100000 178310
0 0
System profit and cost Total cost of collecon and System profit and cost Total cost of collecon and
saving recycling centers saving recycling centers

profit cost saving profit cost saving

Total cost, profit and cost saving of collecon

and recycling system under Scenario 3
600000
500000
400000
300000
153100 501007
200000
100000 181400
0
System profit and cost Total cost of collecon and
saving recycling centers

profit cost saving

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