Robust Facility Location Selection Under Facility Failure in Close-Loop Supply Chain

Public health emergencies, along with worldwide disasters, have been weakening the supply chain’s upstream and downstream connections, further threatening the effective operation of facilities. In the closed-loop supply chain of the new energy industry, the failure of intermediate facilities will not only triggers a jump in holding costs, but also affect the supply of raw materials for the following productions. To this end, we develop a two-stage distributed robust optimization model to optimize the location of intermediate facilities in the closed-loop supply chain, and provides an optimal solution for the decision-making of raw material recycling and remanufacturing and the investment ratio of recycling process. We also conduct a case study in Shandong Province, China, and collects relevant data about local impacts of Covid-19 to conduct facility failure simulations. Numerical results show that the model has a more sensitive response to the combination setting of different parameters, and gives the best decision-making scheme considering the worst risk level.