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Article history: A cleaner and sustainable environment is becoming a topmost priority for both owners and stakeholders
Received 16 February 2019 involved in businesses. It could be achieved by adopting better sustainable practices like reduction in
Received in revised form waste through process of recycling, recovery and remanufacturing which helps to minimize both the cost
14 November 2019
and environmental losses. With a recent surge in E-commerce market and online shopping in India there
Accepted 16 November 2019
Available online 18 November 2019
is a need for a more efficient, sustainable and reliable reverse logistics design by including cost, envi-
ronmental and social factors into consideration. With the factors considered above this paper proposes a
Handling Editor: Kathleen Aviso multi-objective logistics network model for the return products specifically pertaining to the Indian E-
commerce market. The components of this multi-echelon supply chain considered are Customer Mar-
Keywords: kets, Warehouses, Delivery Hubs, Landfills, Incineration Centres and Recycling Centres. The multi-
E-commerce objective optimization is done on the three fronts of sustainability, namely, economical, represented
Reverse logistics by cost, environmental, represented by environmental impact of different process, and social, which is
Sustainability represented by work days created and lost due to harms at work. Different technologies are considered in
Multi-objective
delivery hubs and mother warehouse which could result in a more efficient way of transferring and
India
processing products. Weighted goal programming (WGP) technique is used by weighing different ob-
jectives to minimize cost, environment impact and maximize the social responsibility. Finally, - model is
validated with a numerical example based on an online retail selling clothes. This study will help the
managers in deciding the number of facility stores and warehouses needed to open and operate, tech-
nology to be adopted for a more efficient way of transferring and processing products.
© 2019 Elsevier Ltd. All rights reserved.
https://doi.org/10.1016/j.jclepro.2019.119348
0959-6526/© 2019 Elsevier Ltd. All rights reserved.
2 P. Dutta et al. / Journal of Cleaner Production 249 (2020) 119348
decides on the number of sites to open, the capacities of the in- function of model when coupled with additional goals like social,
spection centres and remanufacturing facilities. Galvez et al. (2015) customer satisfaction, enhancing service performance helps to
designed a RL network for a biogas plant. Network characterization have a more robust and sustainable network design. Chaabane et al.
was done by defining different processes involved, actors, variables (2012) proposed a model for sustainable supply chain with multiple
associated are identified followed by describing different scenarios goals of minimizing the costs and also reducing the negative effects
possible and where the equipment could be located, additionally on the environment.
defining the logistics network route and translating into mathe- Paksoy et al. (2010) suggested a multi objective model for a
matical language using linear equations and then Analytic Hierar- CLSC. The model aims to minimize the raw material and trans-
chy Process (AHP) was used to make a peer comparison. portation cost along with minimizing the CO2 emissions. Ramezani
Kumar et al. (2017) have proposed a multi-period, multi-echelon et al. (2013) developed a stochastic multi objective model consid-
closed loop supply chain model in there model they also address ering three echelons in forward direction and two echelons in
the issue of vehicle routing in their model. The network flow was reverse supply chain. The paper aimed at maximizing the profit,
such there were facility stores, distributors to receive goods directly customer responsiveness and quality. Silva et al. (2013) had
form the customer or the facility store, used goods directly collected developed a return-oriented packaging model to optimize the
from the customer and distributed to the disassembly location then waste generation and reduce the environmental impacts keeping in
gods for disposal are sent to the location of disposal and repaired to mind the minimization the costs and use of resources. Nikolaou
the distribution center from where they could again be distributed et al. (2013) had developed a model which included both the so-
and recycled goods again to the facility location and from here they cial responsibility of companies and sustainability in the RL SC
again enter the supply chain. The products that were received from system. Bing et al. (2014) designed a sustainable network for the
the remanufacturing center and repairing center were sold to the household plastic waste, here the authors addressed that efficiency
secondary markets. Then solved the case using Artificial immune is not the only concern for recycling system, sustainability is also a
system and particle swarm optimization and compared the results crucial issue. The paper dealt with plastic recycling in Netherlands,
from both the algorithms. Bortolini et al. (2018) designed a bi- where different scenarios were seen concerning the placement of
objective fresh food supply chain networks by considering both different facilities pertaining to separation, sorting and inspection
reusable and disposing packaging containers, they applied this and compared with the base scenario. MILP was used to minimize
model in an industrial application in Italy and suggested a shipping the transportation cost and environmental impact in the network.
mix of both containers are required. Ramos et al. (2014) solved a multi-objective vehicle routing prob-
lem considering the sustainable aspect i.e. economic, environ-
2.2. RL in E-Commerce SC mental, and social aspects in designing the RL systems.
Godichaud and Amodeo (2015) tried to optimize inventory level
E-commerce is defined as sharing business information, main- and service performance. Two types of inventory returned in-
taining business relationships, operating business negotiations, ventory and serviceable inventory were taken into consideration.
settling and executing agreements by means of telecommunication Three policies were presented with returned products and then
networks, often the Internet, to achieve business transactions. simulation was carried on the first objective to optimize the cost
Kokkinaki et al. (2000) talks about the relation between RL activ- function. The second objective was to optimize the fill rate i.e. the
ities and the information technology to examine these in the field fraction of demands that could be immediately satisfied from hand.
of E-Commerce applications. Dekker et al. (2002) through their Govindan et al. (2016) had developed a fuzzy multi-echelon, multi-
panel discussion related to RL in E-Commerce focussed on issues period, multi-objective model for a reverse logistics network
pertaining E-commerce and RL, ranging from operations for design. The multiple goals considered are minimize the net present
collection, selection and decision making for the optimal recovery cost, minimize the environmental impacts and optimizing the so-
option of post-retail or surplus products nearing their life cycle. Yan cial responsibility. The model was further validated in a medical
et al. (2012) have designed a reverse network design for e-com- syringe industry. Zohal and soleimani (2016) proposed a multi-
merce by considering four participants: factories, online retailers, objective model in a closed green supply chain network which
the 3 PLs and markets and only one type of the product for the E- had a seven-layer network with four echelons in the forward
commerce enterprise and used a MILP to minimize the logistical supply chain and three echelons in the reverse supply chain. The
cost of the whole system. multiple objectives were to maximize the income and minimize the
Guo et al. (2017a,b) have proposed a multi-period model for the CO2 emissions and cost. Gold industry real case study problem was
reverse network design of the apparel E-commerce enterprises and formulated and solved using Ant colony optimization.
have eight elements in their model ranging from customers to Bal and Satoglu (2018) proposed a reverse network design for
secondary markets with an aim to minimize the total logistics cost Waste electric and electronic equipment (WEEE) with four goals
as well as the number of primary recycling and union recycling which are minimization of cost, minimization of environmental
centre. The model was validated on a shanghai apparel ecommerce effect, workforce balance and managing the legal targets. The
enterprises. Guo et al. (2017a,b) had designed a Closed loop supply model is validated on WEEE of home appliances using goal pro-
chain (CLSC) network with an aim to reduce the carbon emissions gramming. Zarbakhshnia et al. (2019) have suggested a multi-
for fresh food e-commerce enterprises with route planning the period, multi objective model for a green closed supply chain
model had dual objectives one to reduce the overall cost of the where the first objective is to minimize the operational cost, second
system and the other is to reduce the routing cost. The model was objective was to minimize the CO2 emissions and third objective
validated on a shanghai commerce enterprise. was to optimize the number of machines used and then model was
validated in a home appliance industry.
2.3. Sustainability and multiple goals in a RL network The main contributions differentiating our efforts from pub-
lished papers on the subject are as follows.
The Integration of the green concepts and sustainability is an
evolving area of research. Along with sustainability the modelling Most of the above cited paper deal with the network design and
of reverse logistics network design with multiple objectives is ignore the integration of both green and sustainable (such as
gaining interest of the researchers. The optimization in cost social issues). They have focused on the pure green and
4 P. Dutta et al. / Journal of Cleaner Production 249 (2020) 119348
environmental issues. Therefore, it was considered to incorpo- There are only 3 disposal options for the product, namely,
rate social issues besides economic and environmental aspects recycling, incineration, and throwing in landfill
into a model of decision making. The warehouses will be owned and operated by the firm while
In all the studies, the economic objective is cost minimization the logistics will be provided by third party
considering only the transportation aspect. Nevertheless, have The distance between the customer market and delivery hub is
defined our economic objective function considering the specified to be less than a certain distance.
transportation and the processing costs as well. The costs elements of the reverse logistics include and is limited
Different technologies in delivery hubs and mother warehouses to transportation, processing at warehouse and fixed cost of
was considered which could result in a more efficient way of establishment of warehouse.
transferring and processing products.
On the whole, this is the first kind of work that proposed a
multi-objective optimization model for sustainable reverse lo- 3.3. Model description
gistics network design in E-commerce market.
The forward logistics starts from the fulfilment centre and then
3. Model formulation RL starts with returns management, when a customer requests
their order to be returned for reasons like product is defective or
In this research the attempt was to develop a model like that of want a size change for the item. Most products are disposed using
actual Indian large e-commerce firms. The importance of applica- any of the three options i.e. Incineration, landfill and recycling
tion of this model increases if considered the fact that such firms Centres.
maybe undergoing certain changes after the introduction of GST. Technology in Warehouses: The warehouses and delivery hubs
operated by different players often have different way of func-
tioning owing to the different technologies used in them. Some of
3.1. Motivation
them maybe highly automated, some partly automated.
Objective of the work: In designing the RL network, our objective
The inspiration for our model from the way actual E-commerce
will be to optimize the three essentials for sustainability;
enterprises are operating in the present scenario, with regards to
the warehouse model, wherein the stock is purchased and kept in
1. Minimizing the total costs incurred in the network
retailer owned warehouses. The levels/echelons in the actual sce-
2. Minimizing the total environmental impact due to trans-
nario are a step or 2 higher than in our model, but have taken 2
portation and the different types of operations and recycling
levels of warehouses, where warehouses will be owned by the firm
processes e This impact will be quantified using the Eco Indi-
but the logistics be carried out by a third party. The idea having only
cator 99 methodology, which is based on the Life Cycle
two levels in warehouse is not to further make the model complex
Assessment (LCA) methodology
and also to ease on the mathematical formulation. since the
3. Maximization of Social responsibility e To quantify this, the no.
warehouse is just a part of our multi-echelon network design and
of jobs created, and no. of work days lost due to harms at work
our main focus is here to optimize the whole network. The model is
will be considered (Pishvaee and Razmi, 2012).
illustrated in Fig. 2. The components of this multi-echelon supply
chain are Customer Markets, Fulfilment centres (Warehouses
The indexes of the different parameters used, the decision var-
owned by retailers), and Delivery Hubs, Disposal Centres (Landfills,
iable, the objective functions, and constraints are explained below.
Incineration Centres and Recycling Centres are the three mediums
for disposal in this network).
3.4. Mathematical formulation
The list of assumptions considered while formulating the model f Index of incineration centres f ¼ 1; 2; 3…………f
are. h Index of Delivery Hubs h ¼ 1; 2; 3…………H
l Index of landfills l ¼ 1; 2; 3…………L
The demand, overall, as well as for each customer market, is m Index of customer markets m ¼ 1; 2; 3…………M
deterministic n Index of recycling centres (NGOs) n ¼ 1,2,3 … … … … …. N
The sellers to the retailer have their own pre-established facil- th Index of technology at delivery hubs th ¼ 1; 2; 3…………Th
ities and they supply to the online retailer using their own tm Index of technology at FC tm ¼ 1; 2; 3…………Tm
logistics w Index of Fulfilment Centres (FC) w ¼ 1; 2; 3…………W
There are only 2 levels of warehousing
Binary Decision Variables
Y th
h If delivery hub ‘h’ with technology th is to be opened or not
Yf If incineration centre ‘n’ is to be selected for disposal or not
Yl If Landfill ‘l’ is to be selected for disposal or not
Yn If RC ‘n’ is to be selected for disposal or not
Y tw
w If FC ‘w’ with technology tw is to be opened or not
Parameters
ghl Amount of returns sent to landfill ‘l’ from delivery hub ‘h’ from the Delivery Hubs to either the disposal centres or the FC.
shn Amount of returns sent to recycling centre ‘n’ from delivery To calculate the environmental impact, the Eco-Indicator 99
hub ‘h’ methodology has been used. This is a damage-oriented method for
mhf Amount of returns sent to incineration centre ‘f’ from de- Life Cycle Assessment which is much shorter than the original LCA
livery hub ‘h’ methodology. It was commissioned by the Ministry of Housing,
jhw Amount of returns sent to FC ‘w’ from delivery hub ‘h’ Spatial Planning, and Environment, Netherlands.
X X X X X X tw X X tl
eith mh
ph þ eic bmh þ eipw þ eihw
c jhw þ c ghl
eipl þ eihl
m h th h w tw l tl
X X X X (1)
þ eitlpl þ eihn
c shn þ eitlpl þ eihf
c shf
h n h f
Athh Lost days due to harms at work at delivery hub ‘h’ using 3.4.1.2. Social objective function. To look into the social aspects,
technology ‘th’ given two indices are considered for social responsibility:(1) the
Atww Lost days due to harms at work at FC ‘w’ using technology number of created job positions; (2) the average lost days resulted
‘tw’ from harms at work.
C Transportation cost of item per km X X X X
Dhl Distance of delivery hub ‘h’ from landfill ‘l’ th tw
J th th
h Ah Y h þ þ J tw
w Aw Y w
tw
(2)
Dhn Aggregate distance of delivery hub ‘h’ from organization h th w tw
cluster ‘n’ for recycling
Dhf Distance of delivery hub ‘h’ from incineration centre ’f’
Dlw Distance of delivery hub ‘h’ from FC ‘w’
3.4.1.3. Economical objective function. This function simply sums
Dmh Distance of market ‘m’ from delivery hub ‘h’
up all the costs related to the reverse logistics supply chain. The
eimhc Environmental impact of transporting product from
objective will be to minimize the costs.
customer market ‘m’ to delivery hub ‘h’
X X X X
eihwc Environmental impact of transporting product from de- tw
livery hub ‘h’ to FC
F th th
h Yh þ F tw
w Yw
h th w tw
eihlc Environmental impact of transporting product delivery hub X X X
‘h’ to landfill ‘l’ þ h bmh
C Dmh þ P th
eihnc Environmental impact of transporting product delivery hub
m h th
X X X XX
‘h’ to recycling centre ‘n’ þ w jhw þ
C Dhw þ P tw ðCDhl þ Pl Þghl
eihfc Environmental impact of transporting product delivery hub h w tw h l
‘h’ to incineration centre ‘f’ XX X X
þ ðC Dhn þ Pn Þshn þ C Dhf þ Pf mhf (3)
eitwpw Environmental impact of processing item at FC ‘w’ with
h n h f
technology tw
eithph Environmental impact of processing item at delivery hub ‘h’ Subject to Constraints:
with technology th
eipl Environmental impact of processing item at landfill ‘l’ Y th tm
h ; Y m ; Yl ; Yn ; Yf ε f0; 1g c h; l; w; n; f (4)
eipn Environmental impact of processing item at recycling centre
‘n’
eipf Environmental impact of processing item at incineration bmh Oth
h c m; h; th (5)
centre ’f’
F th
h Fixed cost of establishing delivery hub ‘h’ with technology ‘th’ jhw Otw
w c h; w; tw (6)
F tw
w Fixed cost of establishing FC ‘w’ with technology ‘tw’
J th
h Job opportunity created at delivery hub ‘h’ using technology am bmh c m; h (7)
‘th’
J tw
w Job opportunity created at FC ‘w’ using technology ‘tw’ bmh ¼ mhf þ jhw þ shn þ ghl (8)
Othh Capacity at delivery hub ‘h’ with technology ‘th’
Otww Capacity at FC ‘w’ with technology ‘tw’ X
P th
h Processing cost at delivery hub ‘h’ with technology ‘th’
bmh ¼ bm c m; h (9)
P tw
w Processing cost at FC ‘w’ with technology ‘tw’
h
X
Y th
h 1 c h; th (10)
3.4.1. Objective functions th
The proposed model has three objective functions i.e. Economic,
environmental, and social.
X
Y tw
w 1 c w; tw (11)
tw
3.4.1.1. Environmental objective function. The environmental
objective function is defined based on: -The environmental impact bmh ; mhf ; jhw ; shn ; ghl 2I (12)
due to transportation from the customer markets to Delivery Hubs,
6 P. Dutta et al. / Journal of Cleaner Production 249 (2020) 119348
According to the equation (1) minimizes the environment goals with the new variables will be
impact due to transportation from market to DH, DH to FC, DH to
landfill, DH to RC, DH to IC along with the impact caused due to Zi - bþ -
i þ bi ¼ Gi i¼1,2,3.. (15)
processing at DH, FC, landfill, RC and IC. (2) optimizes the social
impact due to establishment of DH and FC. (3) Minimizes the Where i is the no. of goals for that objective function. Zi here de-
economic cost which includes fixed cost of setting up DH and MW, scribes the function f(x) that we are looking to minimize or maxi-
transportation and processing cost at DH, MW, RC, IC, RC and mize, Gi is the target value for the objective, bþ i represents the
landfills. (4) ensures the binary constraint for decision variables. positive deviation from the target value and b-i is the negative de-
(5)e(6) are the capacity constraints for DH and FC. (7) makes sure viation from the target value.
that demand is greater than the returns. (8) maintains the volume For our 3 objectives we will have 3 such equations
flow constraint where the total returns received is either sent to the
disposal centres or FCs. (9) maintains the volume flow constraint Environmental: Z1i - bþ -
1i þ b1i ¼ G1i (16)
for the demand. (10)e(11) maintains the technology constraint that
only one technology be selected for DH and MW. (12) enforces that Social: Z2i - bþ -
2i þ b2i ¼ G2i (17)
the demand and return be integer values.
Economical: Z3i - bþ -
3i þ b3i ¼ G3i (18)
4. Methodology The new combined objective function would require both the
bþ, b terms as our functions are both minimization and maximi-
To solve the proposed multi-objective model, a WGP optimiza- zation functions. There are 2 ways to generate a single objective
tion method is used. Goal Programming (GP) is tool for multi- function from these equations
criteria decision making problem, which can be thought of as be-
ing an extension to linear programming to handle objectives that Non-weighted: Min Z0 ¼ bþ þ þ
1i þ b2i þ b3i (19)
generally opposing to each other. It was first introduced by Charnes
et al. in (1955), more explicitly defined by the same authors in 1961 Weighted Approach: Min Z0 ¼ q1bþ þ þ
1i þ q2b2i þ q3b3i (20)
(Charnes and Cooper, 1962) and further developed by Ijiri (1965)
during the 1960’s. Lee (1972) introduced the lexicographic goal Where q1, q2, q3 are the weights assigned to objectives Z1, Z2, and Z3
programming variant where the priority level was added, it is also respectively.
termed as ‘pre-emptive’ goal programming. Flavell (1976) intro-
duced Chebyshev goal programming where maximum deviation 5. Numerical example
from any goal was calculated. Charnes and cooper (1977) stated the
weighted goal programming method. Schniederjans and Hoffman To validate the model, the proposed datasets are hypothesized.
(1992) introduced the 0e1 goal programming. Further, Romero The data within these has been gathered from formal and informal
(2001) extended the lexicographic goal programming. Though surveys, meeting, and telephonic conversations with industry ex-
there are several MODM techniques like goal attainment (Gembicki perts and some essential data has been taken from a Mumbai based
&Haimes, 1975), Parametric Lp (Adler and Monterio, 1992), Lp e-commerce company. The scales, sizes, and all approximations
metric (Lee, 1980), fuzzy method (Tiwari et al., 1987), in this paper used have been inspired from literature as well as experts from the
we have used WGP to solve the proposed model. WGP helps the online retail industry. Detailed investigation has been done and
decision maker whenever information relating to trade-offs be- experience been gathered to formulate information for testing the
tween different objectives is needed. It also helps to make direct model. Below is a proposed hypothetical case study based on online
comparisons between objectives. (Tamiz et al., 1998). retailer for cotton based clothing (see Table 1).
Larbani and Aouni (2011) in their GP model introduced a new
approach for generating efficient solutions. Sen and Nandi (2012) 5.1. Background
have applied the GP in the field of planation management. Silva
et al. (2013) has applied multi-choice mixed integer goal pro- An online retailer of clothing items is considered. Since each
gramming for the sugar and ethanol milling company. Huang et al. type of textile clothing has different waste disposal and recycling
(2018) developed a GP based model system to study the dynamic procedure therefore for simplicity purposes, have taken a retailer
analysis of community energy flow. Bal and Satoglu (2018) have that sells all kinds of clothing item made of only cotton. While using
used a GP in their triple bottom line approach model for the WEEE eco indicators it was important to be careful as each indicator
items. In the model deterministic values are assumed and a WGP signifies different waste processing methods. Hence, choosing
optimization method is applied by weighing all the three objectives cotton will help to take a uniform single environment impact value
of our model iteratively and then finding a suitable combination vide the Eco-Indicator 99 set of values. The retailer serves in four
fulfilling the set goals. major markets as listed in Table 2. After outsourcing all the logistics
Algebraically, a WGP has the following structure: for so long, the firm has finally decided to invest in their own lo-
P
k
gistics in terms of warehouses to make way for reduced costs and
Minimize a ¼ ðai ni þ bi pi Þ, (13) where ai and bi are the
i¼1 increasing volume of business. They will still be using third party
weights for the deviational variables logistics providers for their transportation needs. They plan to set
up optimum delivery hubs nearest to any of these four markets. All
subject to fi(x)þni-Pi ¼ bi, i ¼ 1. . .. m, (14) these cities have their own disposal centres in the form a major
landfill or several Non-governmental organizations(NGOs) that are
To deal with the three objectives in our example problem via GP, spread throughout the city. They also must set up two fulfilment
we need to introduce additional variables. These variables will centres with much larger capacities, that will serve these Delivery
handle the deviations from the “goal” for each objective. Setting a Hubs. An analysis of their materials flow has suggested that it
numeric goal for each objective is up to the user. would beneficial that they set up these fulfilment centres in any
Then the new equation linking our objective function (Z) and its two out of the four cities given in Table 2.
P. Dutta et al. / Journal of Cleaner Production 249 (2020) 119348 7
Table 1
Summary of literature review.
The analysis here is being executed for a single period, i.e. one
month. The complete demand for a month is appx. 10 million units.
The returns that the firm must manage from the above markets is to
the tune of 1 mil. (industry average of ~10%). As per past data,
majority of the returns, i.e. ~60% are due to a change in the size of
the clothing item. These items are simply sent back to the fulfilment
centre from the delivery Hub. The remaining 40% of the items are
defective and cannot be resold.
Table 3 by states and cities. The units consumed are taken in proportion to
Fixed Cost of establishing Delivery Hubs and Fulfilment Centres with the volume handled by each hub. Note that there will be two
Technologies(Rs).
processing costs for each technology that is employed, that is
Delivery Hub options Fixed Cost with Tech1 Fixed Cost Tech2 because the electricity consumed in case of automated warehouse
W 17340000 22340000 will be higher leading to higher processing cost per unit. The
X 17100000 22100000 various potential processing at the delivery hubs and warehouses
Y 16300000 21300000 are given in Table 8.
Z 16900000 21900000
Although, the cost should vary with geographies due to differing
Fulfilment Centre Options Fixed Cost with Tech1 Fixed Cost Tech2 transporter services as well different diesel rates, it comes out to be
A 43350000 55850000 roughly around Rs. 1. Per km per unit, and thus, we will take the
B 36375000 48875000 same for simplicity of calculations.
Table 8
Processing Cost per Unit for Delivery Hubs with both Technologies.
Wages(Rs) Electricity Consumed(Kwh) Processing Cost per Unit(Rs) Wages(Rs) Electricity Consumed(Kwh) Processing Cost per Unit(Rs)
Table 9
Jobs created, and harm accrued in work days.
Delivery Hub options Jobs (Work Days) T1 Jobs (Work Days) T2 Harms (Work Days) T1 Harms (Work Days) T2
Table 10
Environmental Impact of processes and transportation.
Clothes considered in 1 kg 2
Table 11
Total costs and selection of hubs, warehouses, landfill and recycling centres.
Economic Goal 670000000 660000000 650000000 640000000 630000000 620000000 610000000 600000000
Environmental Goal 27000000 26000000 25000000 24000000 23000000 22000000 21000000 20000000
Social Goal 10000 9500 9000 8500 7500 7000 6500 6000
Economic Cost 670000000 659999852 629305242 638942809 598768560 606989662 609995405 533630033
Environmental impact 23173066 19367352 25000020.2 23999998.4 22999998.2 22000000.7 20999950 19999997.4
Social Cost 10223 9557.6 9140.7 8953.6 7956.7 7769.6 6585.6 8103.5
Delivery Hubs Opened H1T1, H2T1,H3T2, H1T1, H2T2,H3T2, H1T2, H2T2, H1T2, H3T2, H1T2, H2T2, H1T2, H3T2, H1T2, H3T2, H1T1, H2T1,
H4T2 H4T2 H4T2 H4T2 H4T2 H4T2 H4T2 H4T2
Mother Warehouse W1T2, W2T1 W1T2, W2T1 W1T1, W2T1 W1T1, W2T1 W1T1, W2T2 W1T2, W2T1 W1T2, W2T2 W1T2, W2T2
Opened
Landfills e e e L1,L3,L4 L3 L3,L4 L1 L1,L2,L4
Recycling Center N3,N4 N3,N4 N1,N4 e N1,N2 N1 N3,N4 e
first technology i.e. H3T1 were opened in most number of the cases.
In case of the mother warehouses it could be stated that mother
warehouse with first technology was opened in all cases except
one. With changing economic goals, the landfills were less
preferred compared to the recycling centres. In case for the recy-
cling centres N3, N4 are opened in most cases for most of the
economic goals.
delivery hub 2 with the first technology i.e. H2T1 were preferable in are the recycling center that was too be opened. It is found that
most of the environmental goal varying. delivery hub 4 with technology 2 in all cases irrespective of social
In case of the mother warehouses it is seen that mother ware- goal. Among the mother warehouses W2T21 was selected in most
house two with technology i.e. W2T1 was opened in all cases of the cases. Landfill L3 was the only landfill that too be opened
irrespective of the environmental goal. Landfill L1, L4 was preferred with changing social goals, while N4 was the recycling centre
landfills that were opened. Recycling centres N3 and N4 are opened in all cases.
selected more as compared to the other two centres. Weights were also assigned to all the three objective goals to
check whether it would influence selecting the hubs, warehouses,
6.3. Varying Social Objective Goal landfills and recycling centres. Where W1 is the weight assigned to
the Economic goal, W2 is the weight assigned to the environmental
As shown in Fig. 6, - the economic and environmental objective objective goal and W3 is the weight assigned to the Social goal. The
goals were kept constant and the social objective goal was varied. values were taken from the iteration 1 of Table 11. Fig. 7 shows the
The social goal was changed regularly to see what changes it will results that were obtained on assigning different weights to the
create in opening of facilities. In Fig. 6 for example for social goal of objective functions, the different weights were run on the goal
10,000 with the rest values of economic and environmental goal is values of 1st iteration from Table 11. The figure depicts how varying
taken from iteration 10 of Table 11. It can be seen that for delivery the weights could impact the decision of opening different
hub H1T1, H2T2, H3T1 and H4T2 are opened as delivery hub with facilities.
technology, W1T2 and W2T2 are opened as mother warehouse
with technology. No landfills are too being opened and N2, N3, N4
Fig. 6. Varying social objective goal. Fig. 7. Varying weights for objective functions.
P. Dutta et al. / Journal of Cleaner Production 249 (2020) 119348 11
680000000 12000
Economic Goal
660000000 10000
Social Goal
640000000 8000
620000000 6000
600000000
4000
580000000
400000000 600000000 2000
Fig. 8. The effect of (a) Economic goal Vs Economic Cost (b) Social Goal Vs Social Cost.
The Table 11 indicates how varying the costs and goals is minimum probability of ai and the constrained (9) can be defined
influencing the closing and opening of the delivery hubs, ware- as follows.
house, and recycling centres. While in all iterations the no of de- X
livery hubs remained either two or three, the no of mother P bmh bb m am c m; h (21)
warehouse to be opened remained constant with two warehouses h
in each iteration. The only changes apart from the total cost
The following Table 12 provides the results of different values
incurred was the varying the no of landfilling centre and the
for economic cost, environmental cost and social cost for different
recycling centres to be used. In iteration 5 there is a one landfill
values of goals with varying chances or probability of realization of
center and two recycling centres while in iteration 8 there are only
the constraints. Then compared the uncertain case with certain
landfill and in iteration1 there are only recycling centres which has
market return and it was found that the percentage changes in
led to the steep rise in the overall cost. There are trade-offs in each
social cost is quite high whereas the changes in environmental cost
iteration among the three costs and a perfect balance is to be
is insignificant. The Fig. 9 compares the cost with different proba-
decided by the manager by taking the future environmental im-
bilities for the chance constraints in certain vs uncertain market,
pacts and social responsibility into account. The Fig. 8(a) shows
viz.; (a) Economic costs in uncertain case was higher in most of the
Economic goal vs economic cost and with increasing goal the
cases, (b) Environmental cost showed a varying trend while with
economic cost also increases steadily then after a point the rise in
the first set of goal the environmental cost in uncertain market was
economic cost slows down with increase in economic goal. Fig. 8(b)
higher or equal to the certain market while with the second set of
shows Social goal versus social cost and both the goal and cost are
goals certain market cost was higher and (c) Social cost in uncertain
increasing together, henceforth then economic goal decreases with
market was always higher than the certain market in all the
the rising social goal to accommodate the target social target and to
scenarios.
accommodate a small increase in the social goal requires a high
increase in the cost once the social target is reached.
7. Managerial implications and conclusions
6.4. Uncertain Return Market This study has significant prospects and implications for SC
Managers and even the leadership of online retailing companies.
In real situation, the return product market may be uncertain Online retailing is still a relatively new industry in India and
and in such scenario, the exact amount of return products may not managers are yet to explore the many distinct opportunities that
be known with certainty. In order to capture this uncertainty in the are present to optimize costs and other factors. This study is first of
model, it was assumed that the return products capacity in the its kind where the network designed in the context of e-commerce
“Return Market” follows normal distribution ( b b Þ with specified and numerical example which is based on online retailer for cotton
m
mean and standard deviation (10% of its mean). Thus the associated based clothing is specific to the Indian context from where the
constrained of expected market return would become stochastic in managers can take a clue of implementing it to their firm by varying
nature. For this-chance-constrained programming (Charnes and the goals as per their firm need and expanding the model as when
Cooper, 1959) was used where the constraint i is realized with a required, by keeping the multiple objectives as per the model. The
Table 12
Comparing costs in Uncertain Vs Certain Market.
Uncertain Market return Certain Market return % change in costs due to uncertainty
1-a
implementation of this will help managers optimize their supply A model to set up reverse logistics supply chain is formulated in
chain to be sustainable as firms are coming under pressure to this paper. This paper specifically caters to the existing and up-
reduce their carbon footprint, increase their social deliverance to coming e-commerce firms aid in decision making towards setting
the society and hence by adopting the important triple bottom line up of their RL. The novelty of this paper lies in that it combines the
approach, striking the right chord by balancing the economic, concepts and ideas of Sustainability, e-commerce in the Indian
environmental and social costs as while optimizing the total cost he context, and RL, with a focus on returns management. The SC
has to keep in mind the environmental impacts and social re- structure used here is a compact and combined version of the one
sponsibility into account. This study will help the managers in being used by existing Indian e-commerce firms and sections
deciding the number of facility stores and warehouses needed to derived from literature covering concepts relating to the triple
open and operate, technology to be adopted for a more efficient bottom line approach.
way of transferring and processing products. The strategic long GP was used to solve this model. A numerical example was
term decisions could then be taken relating to the opening of new formulated, the data for which was determined using inputs from
warehouses and which technology to be adopted for the respective experts from the online retailing industry and a specific firm in
delivery hub and mother warehouse. The numerical example will Mumbai, dealing in clothing accessories like t-shirts. The solution was
help to identify the different weights to give to different objectives obtained using Microsoft Excel. The solution was tested by varying the
while minimizing the costs, maximizing the social responsibility goals for each objective vehemently and changing weights for
and achieving the set goals. different goals to get the full extent of the flexibility of the model.
Uncertain EC Certain EC
(a)
(b)
10000
5000
0
0.8 0.9 0.95 0.99 0.8 0.9 0.95 0.99
Uncertain SC Certain SC
(c)
Fig. 9. Cost comparison with different probabilities for the chance constraints in certain vs uncertain market: a) Economic costs b) Environmental costs c) Social costs.
P. Dutta et al. / Journal of Cleaner Production 249 (2020) 119348 13
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