A robust multi-objective MIP model to optimize the supply chain of steel industry taking into account the sustainability approach

Abstract

The construction of a steel production plant in the countries provided that they benefit from the required raw materials, and infrastructural facilities such as roads, power plants, water, etc. are considered an economic advantage. If these prerequisites exist, the next challenge in building a steel plant is to determine the number, optimal location, and flow between the supplier and the plant and also between the plant and the consumer market. On the other hand, there is always a serious challenge for environmental issues and the impact on pastures and wildlife due to the polluting nature of this industry. In addition, considering the situation in which the amount of consumption under disruptions makes the supply chain of steel inefficient, it is necessary to design a model that is close to the real world. In this study, to obtain the optimum number and location of steel factories, material flow, and considering the sustainability approach, we design a robust three-level supply chain network for the steel industry, taking into account the sustainability approach including three objective functions. The first objective function aims to minimize logistics and production costs, the second objective function maximizes the quality score of the final selected location, and the third objective function is proposed to maximize the efficiency of product production lines. In this study, a scenario-based robust optimization model is applied to overcome the uncertainty of the proposed model. Furthermore, to incorporate the score of location into the third objective function, a decision-making method based on the sustainability approach is used. Finally, the proposed model is validated within steel industry in Iran as a case study.