Optimization of multi-product, multi-period closed loop supply chain under uncertainty in product return rate: case study in Kalleh dairy company

Closed Loop production systems attempt to economic improvement, deliver goods to customers with the best quality, decrease in the return rate of expired material and decrease environmental pollution and energy usage. In this study, we solve a multi-product, multi-period closed loop supply chain network in Kalleh dairy company, considering the return rate under uncertainty. The objective of this paper is to develop a supply chain model including raw material suppliers, manufacturers, distributors and a recycle center for returned products. Solving this model helps us to make a good decision about providing materials, production, distribution and recovery. Our basic goal is to estimate optimum return rate of some products such as yoghurt, to production cycle. Once the products pass 3/4 of their shelf life, they are returned to production cycle. For this study, we develop a linear programming model with a consideration of chance constraints. Finally, this model is implemented by Lingo software with using real data. The obtained results by our model show 9.5 % decrease for total cost in comparison with the current status.