Sustainable Supply Chain Network Design: A Multicriteria Perspective

In this paper we develop a rigorous modeling and analytical framework for the design of sustainable supply chain networks. We consider a firm that is engaged in determining the capacities of its various supply chain activities, that is, the manufacturing, storage, and distribution of the product to the demand locations. The firm is faced with both capital costs associated with constructing the link capacities as well as the links’ operational costs. Moreover, the firm is aware of the emissions generated associated with the alternative manufacturing plants, storage facilities, and modes of transportation/shipment, which may have different levels of emissions due, for example, to distinct technologies of, respectively, production, storage, and transportation. The firm is assumed to be a multicriteria decisionmaker who seeks to not only minimize the total costs associated with design/construction and operation, but also to minimize the emissions generated, with an appropriate weight, which reflects the price of the emissions, associated with the various supply chain network activities. We provide both the network optimization modeling framework and an algorithm, which is then applied to compute solutions to a spectrum of numerical sustainable supply chain design examples in order to illustrate our approach.