Optimal integrated production and inventory cycles in a whole green manufacturing supply chain network with coordination

This paper proposes integrated production and inventory cycle in a whole green manufacturing supply chain network which consists of multiple-raw materials suppliers named as tier-2 suppliers, multiple-parts suppliers named as tier-1 suppliers, a manufacturer, multiple distributors, multiple retailers and a third party product collector. In a whole manufacturing supply chain network, tier-2 suppliers supply raw materials to tier-1 suppliers producing parts. Parts from tier-1 suppliers are then supplied to a manufacturer which manufactures and assembles parts into finished products. Then, the finished products will be delivered to distributors distributing them to retailers. Because each player wishes to minimize total cost for itself and can supply multiple raw materials and parts, there is a need for coordination among players of the supply chain. The coordination which is used in this paper is for both centralized and decentralized decision processes. Due to environmental and ecological consciousness and responsibility as a result of increasingly rigid environmental legislations and growing environmental concerns in recent years, this paper also considers recovery option of finished products where some of the parts will be reused in new finished products. A mathematical model with multiple decision variables is developed. A numerical example is presented and results discussed.