A two-level pricing-inventory-routing problem in green closed-loop supply chain: Bi-level programming and heuristic method

In this paper, a bi-level mathematical formulation for a pricing-inventoryrouting problem in the context of sustainable closed-loop supply chains is developed. The two levels are entitled as the upper level model and the lower level model. The upper level model (the leader model) tries to minimize greenhouse gas (GHG) emissions while the lower level model (the follower model) focuses on profit maximization. To solve the problem, an enumeration heuristic method based on knapsack problem and genetic algorithm (GA) is devised. The results show that the heuristic method is capable of obtaining high-quality solutions in reasonable CPU-times.