DESIGN OF A MULTIPURPOSE SUSTAINABLE NETWORK MODEL FOR REVERSE LOGISTICS, AND ITS IMPACTS ON BELT AND ROAD INITIATION (BRI) OF SAUDI ARABIA

Abstract

This research focuses on the design of a multicomponent supply network model. In this research, the concept of reverse trade for international business is introduced. In reverse logistics containers and ships carry a product type A and in turn they bring product type B to the source location. This research addresses the design and optimization of reverse trade. Design and optimization of reverse trade is based on multi-objectives, multi-product, multi-period, and multi-route. This work is composed of four phases, in the first phase a mathematical model is developed for cost, revenue, and time. Cost is composed of selection of nodes and transportation cost; revenue comes from both forward and reverse flows. The time consists of transportation time. Constraints in the model introduce the capacity, demand, and transshipment constraints. In the second phase a solution methodology called epsilon constraint method is used to solve the mathematical problem in two steps. Initially, to validate the solution methodology, a set of numerical problems with hypothetical data have been solved and their results have been analyzed in term of solution quality and computational time. It was found that epsilon constraint method is an effective method for all sizes of problems. In the third phase, a case study of reverse trade between China and KSA is presented considering Arabian Sea and China Pakistan Economic Corridor (CPEC). The results provided the selection of suppliers and customers and their allocation for the flow of products. The concept of reverse trade is unique in this research. Sensitivity analysis is also performed to check the robustness and sensitivity of mathematical model. Also, to extend the proposed methodology of epsilon constraint method same case study is solved using interactive multi-objective fuzzy programming and results have been compared and results show that epsilon constraint method is better than interactive multi-objective fuzzy programming in terms of objective function values and computational time. The proposed research is useful for the supply chain and procurement design in international business. In the last stage policy recommendations have been made which are based on results of case study. It has been found that CPEC route is viable for the suppliers closer to Kashgar in China. However, supplier in Wuhan can gain advantage of Arabian sea for the reverse trade between KSA and China.

Keywords: Reverse trade; Revenue; Cost; Delivery Time; Route optimization; CPEC; Arabian Sea; Supplier selection; Reverse flow; Epsilon Constraint Method; Interactive Multi-Objective Fuzzy Programming; Competitive advantage; logistic policies.