Effects of integrating physical and financial flows through a closed-loop supply chain network under uncertain demand and return

The impact of financial challenges on the profit of a supply chain, have caused the researcher to model the supply chain network by considering the operational and financial dimensions. Also, the establishment of a closed loop supply chain (CLSC) network has a high effect on economic profit. So, the purpose of this study is to design a stochastic closed loop supply chain network by considering the operational and financial dimensions and tactical decision-making level. First, a deterministic mixed-integer linear programming model is developed. Then, the scenario-based of the proposed mixed integer linear programming model is presented. The main innovation of this research is to develop a mathematical model that simultaneously focuses on optimizing the financial and physical flows in an integrated manner and uses the financial ratios in the form of a closed loop supply chain. In order to illustrate the applicability of the proposed model, a test problem from the recent literature is used. The analysis of the results obtained from the developed stochastic mathematical model shows an averagely 4% increase in profit and a 27% reduction in semi-variance compared to deterministic developed models.