Simulation-Optimization Approach for the Production and Distribution Planning Problem in the Green Closed-Loop Supply Chain

Abstract With the growth of multinational companies, increasing international and domestic competition between companies, upgrading information technology, and increasing customer expectations, accurate supply chain (SC) planning is essential. In such an environment, pollution has become more severe in recent decades, and with the weakening of the environment and global warming, green SC management (GSCM) strategies have become more attention in recent decades. In this research, we consider the integrated production and distribution (PD) planning problem of a multi-level green closed-loop SC (GCLSC) system, which includes multiple recycling, manufacturing/ remanufacturing, and distribution centers. We present a three-level bi-objective programming model to maximize profit and minimize the amount of greenhouse gas emissions. A hierarchical iterative approach utilizing the LP-metric method and the non-dominated sorting genetic algorithm (NSGA-II) is introduced to solve the proposed model. Also, the Taguchi approach is applied to find optimum control parameters of NSGA-II. Moreover, Monte Carlo (MC) simulation is applied to tackle uncertainty in demand, and the NSGA-II algorithm is fusioned with MC simulation (MCNSGA-II). The results obtained show that the simulation-optimization approach presented better results than the deterministic approach.