A Novel Supply Chain Network Design Considering Customer Segmentation using Lagrangian Relaxation Algorithm

Environmental issues are unavoidable in supply chain management. Providing different level of green products is a major subject in this area for distinctive customer segments. In this research, a capacitated network design problem with different levels of green products for their specific demands is considered. This network has different levels with multiple products. The forward/reverse network consists of plants, hybrid warehouse/disposal centers, and customers. Two types of vehicles are considered to transport the products among the network. Each customer segment has specific needs based on their attitude to the greenness subject and their willingness to pay more money in order to attain a product with higher degree of greenness. A quadratic function is assumed for extra money to produce green products. To evaluate the reliability of the model, a real example proposed. Large size sample problems are solved using an efficient Lagrangian relaxation method. The results presents that the proposed method solved large size sample problems in a reasonable time.

Keywords:

Level of greenness , Lagrangian relaxation , Supply chain design , Customer segmentation