Sustainable Supply Chain Design with Considering Uncertainty in Suppliers’ Risk

Risk management is a significant issue in supply chain management. Improving the ability to control and manage the risk, enables the companies to be more successful in competing with other companies and decrease the expected long-term loss. In this manuscript, a mixed integer linear programming model for designing the green supply chain is presented. This model aims to minimize the cost, greenhouse gas emissions, and risk. Risk of supplying the raw materials and transportation in all levels of supply chain are under uncertainty. Furthermore, cost of raw materials is suggested by suppliers to producers with an incremental discount. The initial modelling is turned into a deterministic one using Bertsimas and Sim budget of uncertainty approach and consequently solved by GAMS software to manage risk. Furthermore, the uncertain parameter is analyzed and using various amounts the obtained result has been assessed and evaluated. The results show that the risk function is the most important factor in objective function, because parameters of risk function are subject to uncertainty.