Modelling a routing-location-inventory problem in the sustainable poultry and livestock medicine supply chain under uncertainty, considering discount

The supply chain management of an organization has a critical role in its success. In the past decades, competition between companies has transformed into the competition between their supply chains. Due to food safety and health concerns in today's society, livestock and poultry medicines are produced and distributed for prevention and treatment. The use of vaccines and timely access to appropriate drugs can reduce disease outbreaks and increase productivity in livestock and poultry industries. The key to success in this matter lies in having an effective and efficient pharmaceutical supply chain. A two-level supply chain of livestock and poultry medicine has been examined in this study. Also, three levels of decisions in the supply chain problem have been considered in this study. The strategic level involves location decisions; the tactical level involves inventory management; and the operational level involves routing. The possibility of drug expiration has been taken into account and sustainability has been also considered due to the drug disposal effects and transportation on the environment. The demand in this network has been assumed to be non-deterministic. Furthermore, quantitative and time-dependent discounts have been considered simultaneously to control the inventory by changing the customers' behaviour.Design/methodology/approach: Three dimensions of sustainability have been optimized by utilizing three objective functions, including minimization and maximization. The economic aspect of a sustainable supply chain is taken into account by minimizing costs. Holding cost, shortage cost, expiration cost, transportation cost, and fixed opening cost have been considered in this study. The focus of the social dimension has been on creating job opportunities and reducing life risks during transportation. Air pollution and greenhouse gas emissions have been considered as the third objective. Robust optimization has been applied to cope with uncertainty. Two meta-heuristic algorithms have been applied to solve the model which has been explained in detail in this paper. A robust counterpart of the multi-objective model presented in this paper was solved by epsilon constraint in CPLEX and by two metaheuristic algorithms, NSGA-II and PBMOSA in the larger size model. The Taguchi settings were applied to both algorithms, and each algorithm was run 20 times with its parameters adjusted to compare efficiency. After comparing 20 executions of the two algorithms using four criteria, it was found that the NSGA-II algorithm performed better. However, there was no significant difference in such an advantage. In addition, the results of the algorithms were compared under deterministic and non-deterministic conditions. In deterministic conditions, objective functions were better, as expected.Practical implications: In this research, a method was proposed to manufacturing companies to plan and make decisions such as distribution locations, appropriate discounts and determining the optimal route. Before this study, in the distribution chain company, only costs and profitability were considered, while according to the concerns of this company, sustainability issues were considered for the first time. Because in this research, location and routing were both considered, social and environmental issues were examined, which are directly related to the issues. Also, before this research, the uncertainty in demand was not considered, which imposed costs on the company. However, by considering the uncertainty, the profit and cost got closer to reality and made the research more practical.Social implications: Since in this paper, the social dimension of the sustainable supply chain was considered as a job opportunity and life risk issue, it seems that this research has a significant social impact.Originality/value: According to the literature, this research ensured the three levels of decision-making in the supply chain, i.e. strategic, tactical, and operational, in terms of location, inventory, and routing. Also, the uncertainty of the supply chain was taken into account, and the expiration of the medicine was considered. Both time-dependent and quantity discounts were considered in the model and all three dimensions of a sustainable supply chain were taken into account.