A strategic and tactical model for closed-loop supply chains

In this paper, a strategic location-allocation model is developed for the simultaneous design of forward and reverse supply chains. Strategic decisions such as network design are accounted for together with tactical decisions, namely, production, storage and distribution planning. The integration between strategic and tactical decisions is achieved by considering two interconnected time scales: a macro and a micro time. At macro level, the supply chain is designed in order to account for the existing demands and returns, whose satisfaction is planned simultaneously at the micro level where tactical decisions are taken. A Mixed Integer Linear Programming formulation is obtained which is solved to optimality using standard Branch & Bound techniques. Finally, the model accuracy and applicability is illustrated through the resolution of a case study.