A Sustainable Competitive Supply Chain Design Considering Uncertainty of Demand (Case Study in the Battery Manufacturing Industry)

In this paper, the problem of sustainable bi-level closed-loop supply chain network design under uncertainty is modelled and solved. The competition is between two supply chains (existing and new), on the selling price of new products in the forward supply chain and purchasing price of returned products in reverse logistics. Demand is price sensitive and the quantity of returned products is dependent on the price of the competitor. Dealing with uncertainty is possible here using fuzzy theory. The bi-level supply chain model is considered to be a leader-follower game. At the upper level, the leader optimizes decision variables of the network design and At the lower level, the follower deals with a non-linear problem with continuous variables. Then Benders decomposition approach is applied to solve the single-level problem. Finally, a case study in the battery industry and a numerical analysis are presented. Results show that increasing the forward elasticity coefficient entails a decline in supply chain profit and as the elasticity coefficient of the competitor increases, the demand becomes more sensitive to the competitive price, and the demand for the competitor declines, leading to a decrease in the rival's profit and an increase in the current supply chain's profit.