An Inventory-Routing Problem for Deteriorating Products in a Closed Loop Supply Chain

The current paper studies a closed loop supply chain that is used for deteriorating products in a two layer chain. The first layer is the producer of such product that delivers them to distribution centers. The second layer is assumed to have buy back contracts with the producer and want to return the deteriorated products to that. The main problem here is to find the best route for delivering new products while collecting the deteriorated ones. It is assumed that using VMI, producer knows about the inventory level at different distribution centers. A mixed integer nonlinear problem is developed and a hybrid heuristic algorithm is suggested to solve the problem.

Keywords:

Inventory-Routing Problem , Closed-loop , Deteriorating Product , Ant Colony Optimization