A closed-loop supply chain network design with considering third party logistics: A case study

Organizations are nowadays seeking competitive advantage over other rivals, reduction of costs, and customer satisfaction for their progress and development. One of the key factors in reaching the competitive advantage is to have a robust logistic system. The available complexities in the forward and reverse integration processes lead managers to take the companies offering third party logistics services as proper alternatives for outsourcing processes. Furthermore, with population growth and development of transportation network, the amount of scrap products related to this industry is increasing. One of the widely used products is tire which could cause irreversible damages to the environment if it is not logically and appropriately disposed after being fully used. Accordingly, this study proposed a multi-period, multi-product, bi-objective mathematical model to design a closed-loop supply chain network in the tire industry concerning sustainability factors (economic and social) under the third party logistic management. The proposed model aimed at maximizing the profit made by different process over the scrap products and reaching social sustainability as well. Furthermore, the environmental impacts were controlled. The augmented epsilon-constraint method was implemented to solve the multi-objective model and reach optimal Pareto solutions. Finally, the proposed model was validated against a case study in the tire industry.