SCND Under Uncertainty Review

European Journal of Operational Research 263 (2017) 108–141
Contents lists available at ScienceDirect
European Journal of Operational Research

journal homepage: www.elsevier.com/locate/ejor
Production, Manufacturing and Logistics
Supply chain network design under uncertainty: A comprehensive

review and future research directions
Kannan Govindan a,∗, Mohammad Fattahi b, Esmaeil Keyvanshokooh c
a
Center for Sustainable Supply Chain Engineering, Department of Technology and Innovation, University of Southern Denmark, Campusvej 55, Odense,
Denmark
b
School of Industrial Engineering and Management, Shahrood University of Technology, Shahrood, Iran
c
Department of Industrial and Operations Engineering, The University of Michigan, Ann Arbor, MI 48109, USA
a r t i c l e i n f o a b s t r a c t
Article history: Supply chain network design (SCND) is one of the most crucial planning problems in supply chain man-
Received 16 October 2015 agement (SCM). Nowadays, design decisions should be viable enough to function well under complex
Accepted 4 April 2017
and uncertain business environments for many years or decades. Therefore, it is essential to make these
Available online 9 April 2017
decisions in the presence of uncertainty, as over the last two decades, a large number of relevant pub-
Keywords: lications have emphasized its importance. The aim of this paper is to provide a comprehensive review
Supply chain management of studies in the fields of SCND and reverse logistics network design under uncertainty. The paper is or-
Supply chain network design ganized in two main parts to investigate the basic features of these studies. In the first part, planning
Uncertainty decisions, network structure, paradigms and aspects related to SCM are discussed. In the second part,
Stochastic programming existing optimization techniques for dealing with uncertainty such as recourse-based stochastic program-
Risk consideration ming, risk-averse stochastic programming, robust optimization, and fuzzy mathematical programming are
Robust optimization
explored in terms of mathematical modeling and solution approaches. Finally, the drawbacks and missing
aspects of the related literature are highlighted and a list of potential issues for future research directions
is recommended.
© 2017 The Authors. Published by Elsevier B.V.
This is an open access article under the CC BY license. (http://creativecommons.org/licenses/by/4.0/)
Contents
1. Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 109
2. Scope and review methodology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 110
3. Decision-making environments for SCND under uncertainty . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 110
4. SCM issues in designing SC networks. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 112
4.1. Network structure and uncertain parameters. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 112
4.2. Planning horizon and decisions for SCND . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 114
4.3. Risk management in SCND problem. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 115
4.4. Resilient SCND . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 116
4.5. Different paradigms in SCM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 116
4.5.1. Responsive SCND. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 116
4.5.2. Green SCND. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 116
4.5.3. Sustainable SCND . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 117
4.6. Humanitarian SCND . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 117
4.7. Other SC characteristics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 117
5. Optimization under uncertainty for SCND . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 117
5.1. Optimization criteria for evaluation of SC networks’ performance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 117
∗
Corresponding author.
E-mail addresses: kgov@iti.sdu.dk (K. Govindan), mohammadfattahy@shahroodut.ac.ir (M. Fattahi), keyvan@umich.edu (E. Keyvanshokooh).
http://dx.doi.org/10.1016/j.ejor.2017.04.009
0377-2217/© 2017 The Authors. Published by Elsevier B.V. This is an open access article under the CC BY license. (http://creativecommons.org/licenses/by/4.0/)
K. Govindan et al. / European Journal of Operational Research 263 (2017) 108–141 109
5.2.
SCND problems with continuous stochastic parameters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 118
5.3.
Chance-constrained programming for SCND . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 119
5.4.
Scenario-based stochastic programs for SCND. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 119
5.4.1. Two-stage stochastic programs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 119
5.4.2. Multi-stage stochastic programs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 121
5.4.3. Scenario generation for stochastic SCND problems . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 124
5.5. Risk measures in the context of SCND . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 125
5.6. Robust optimization in the context of SCND . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 125
5.6.1. Robust models with discrete scenarios . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 126
5.6.2. Robust models with interval-uncertainty . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 126
5.7. Fuzzy mathematical programming in the context of SCND . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 127
5.8. Optimization approaches for SCND with disruptions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 128
6. Applications and real-word case studies for SCND . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 130
7. Discussion, conclusions, and future research directions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 130
7.1. SCM aspects in SCND under uncertainty . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 130
7.2. Optimization aspects in SCND under uncertainty . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 132
Acknowledgment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 132
Appendix A. Features and structure of logistics networks in the related literature . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 133
Appendix B. Mathematical definition of well-known risk measures in the related literature . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 137
References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 137
1. Introduction Several review papers exist on FL models, (e.g., Daskin, 2011;

Owen & Daskin, 1998) and some surveys focus particularly on dis-
In the early 1980s, SCM was introduced in order to respond crete location models (e.g., Klose & Drexl, 2005; Mirchandani &
to fierce competition among companies (Oliver & Webber, 1982). Francis, 1990; Revelle et al., 2008). However, FL models in the con-
Over time, a growing number of corporations realized the signif- text of SCM have been reviewed by only a few papers, including
icance of integrating their operations into key supply chain (SC) Daskin, Snyder, and Berger (2005), Shen (2007b), and Melo et al.
processes instead of managing them separately, thus extending (2009). Therefore, there is still ample room to survey SCND mod-
the SCM evolution (La Londe, 1997). As pointed out by Handfield els and methods.
and Nichols (1999), SCM is "The holistic management approach Large investments are usually required to make strategic de-
for integrating and coordinating the material, information and fi- cisions in SCND. These decisions are very difficult to change and
nancial flows along a supply chain." In accordance with Simchi- have long-term effects on SC’s performance. The most common
Levi, Kaminsky, and Simchi-Levi (2004) and the Council of Supply strategic decisions consist of determining locations and number of
Chain Management Professionals, Melo, Nickel, and Saldanha-Da- facilities, capacities and sizes of facilities, technology and area al-
Gama (2009) also defined SCM to be "The process of planning, im- location for production and process of products at different facil-
plementing and controlling the operations of the supply chain in ities, selection of suppliers, and so on (Simchi-Levi et al., 2004).
an efficient way." Several issues, such as appearance of short-life Over time (generally between three and five years), when a com-
products, fierce competitions in today’s markets, increasing expec- pany has been influenced by these decisions, many parameters,
tations and changing customers’ preferences, the development of including demand, capacity, and costs of its SC network, can
new technologies, and globalization have led business enterprises have major fluctuations. Further, the parameters associated with
to make large investments in their SCs (Simchi-Levi et al., 2004). SCND involve an enormous volume of data, often resulting in
A SC, a complex network of organizations and facilities which wrong estimations due to inaccurate forecasts and/or poor mea-
are mostly settled in a vast geographical area or even the globe, surements in the modeling process (e.g., aggregation of demand
synchronizes a series of interrelated activities through the network points and products). Thus, SCND under uncertainty has obtained
(Christopher, 1999). The SC network is also referred to as the logis- significant attention in both practice and academia over recent
tics network by Simchi-Levi et al. (2004), and Ghiani, Laporte, and years.
Musmanno (2004) defines the SC as "a complex logistics system in Designing reverse logistics (RL) networks is another type of op-
which raw materials are converted into finished products and then timization problem based on the FL models. The RL networks are
distributed to final users (consumers or companies)." On the other often designed for the purpose of collecting used, refurbished, or
hand, Hugos (2011) points out that some differences exist between defective products from customers and then carrying out some re-
logistics management and SCM. In essence, logistics management, covery activities. Due to the stringent pressures from environmen-
as a portion of SCM, focuses on activities such as inventory man- tal regulations, many companies have been confronted with the
agement, distribution, and procurement that are usually made on challenge of designing RL networks. Locating facilities to perform
the boundaries of a single organization, while SCM includes other recovery activities is one of the key strategic decisions to be made
activities such as marketing, customer service, and finance as well. in this problem. Indeed, these facilities should operate properly
SCND, also called strategic supply chain planning, is a part of the over many years under uncertain business environments. Thus, the
planning process in SCM, which determines the infrastructure and task of dealing with existing uncertainty in the return quantities
physical structure of a SC. Over the last two decades, SCND has and other parameters of RL networks plays a significant role in de-
been considered as a suitable application for facility location (FL) signing them. RL network design under uncertainty has attracted
models. Revelle, Eiselt, and Daskin (2008) characterized existing FL a great deal of attention and, as a result, an investigation into this
models into four main types: continuous, network, analytic, and dis- problem is included in our review paper as well. It is noteworthy
crete. In spite of many differences among these models, they all that this problem has many similarities to the SCND in terms of
include a set of customers with known locations and a set of facil- optimization approaches. Further, the forward and reverse logistics
ities whose locations should be specified. Most SCND models be- networks are often integrated, also known as closed-loop supply
long to the category of discrete location models (Melo et al., 2009). chain (CLSC) network.
110 K. Govindan et al. / European Journal of Operational Research 263 (2017) 108–141
The main purpose of this paper is to review the studies and OR recovery network OR distribution network) AND (design OR plan-
optimization approaches developed for designing SC, CLSC, and RL ning) AND (stochastic OR uncertain OR robust OR risk OR fuzzy OR
networks under uncertainty. Briefly, our major research questions reliable OR resilient), we obtained 259 journal papers from Scopus.
in this field are: However, many of them were not published in ISI indexed journals
or more specifically, they did not satisfy the second or third cri-
i. Which SCM paradigms and issues are addressed?
teria, which are the key considerations in this study. Further, the
ii. What sources of uncertainty are considered?
scope of this survey was addressed with other keywords such as
iii. How are uncertain parameters modeled and integrated into the
transportation–production, and transportation–inventory networks
existing mathematical formulations?
by a few studies in the past. Therefore, to resolve the limitations of
iv. Which optimization techniques and tools are mostly utilized?
our search keywords and provide a comprehensive review, we have
v. Which real-world case studies are investigated?
completed our survey by utilizing other survey and review papers
In this regard, Snyder (2006) represented a survey on stochastic in the area of SCND, FL, and SCM.
and robust FL problems without consideration of SCM aspects. Re- Using all afore-mentioned search strategies, 170 journal papers,
liable FL models for SCND with disruptions were studied by Snyder published from 20 0 0 up to now, are explored. We refer to them
and Daskin (2007) . Furthermore, a critical review on optimization as reference papers from now on. The distribution of these refer-
models for robust design of SC networks was represented by Klibi, ence papers in terms of their publication date is shown in Fig. 1. In
Martel, and Guitouni (2010). They categorized existing uncertain- Fig. 1, more than 50% of these papers were published from 2012 up
ties in the SCND problem and investigated their impacts on the to now where many developments and much progress have been
network as well. Moreover, SCND has been the subject of many made in the area of optimization, and this recent trend reveals the
recent review papers focusing on other SC features (e.g., Farahani, importance of uncertainty in the area of SCND problem.
Rezapour, Drezner, & Fallah, 2014; Eskandarpour, Dejax, Miemczyk, In addition, Fig. 2 elucidates the share of international journals
& Péton, 2015). However, to the best of our knowledge, there has that have the highest contributions in publishing the reference pa-
not been any review paper in the area of SC and RL network design pers: European Journal of Operational Research and Transportation
under uncertainty that focused on both SCM aspects and optimiza- Research Part E: Logistics and Transportation Review occupy first and
tion techniques. Therefore, in the presented survey on this area: second rank by publishing 17 and 15 papers, respectively.
Additionally, Table 1 displays existing review papers in the rel-
A comprehensive and categorized review is provided in ac-
evant literature. Note that all these papers are in the area of SCM,
cordance with network structure, planning decisions and main
but some of them explored the FL or logistics network design mod-
SCM issues.
els in SCM, specifically. Their scope and special features are re-
Various uncertainty sources and different uncertainty modeling
ported in Table 1. Moreover, the numbers of reference papers that
approaches for developing an optimization model are studied.
have some overlapping with our review paper are put in the last
Optimization techniques, including modeling and solution ap-
column of Table 1.
proaches to deal with uncertainty, are investigated as a general
As shown by Table 1, while there are overlapping areas between
framework.
other review papers and ours, to our knowledge, no review pa-
Relevant real-life applications and case studies are explored.
per has examined the aspects taken into account in this paper.
Finally, significant research gaps are introduced to be investi-
In summary, the purpose of this paper is to explore the studies
gated as future studies by scholars and researchers.
that have been made in the area of SCND (including CLSC and
The remainder of this paper is organized as follows: In RL network design as well) under uncertainty to highlight the re-
Section 2, the scope and our research procedure are introduced. search gaps and future research directions. Therefore, the reference
In Section 3, different related decision-making environments are papers are investigated in terms of different uncertain decision-
discussed. The associated papers are categorized consistent with making environments, network structures, planning decisions, var-
the SCM issues in Section 4. Optimization aspects in the related ious paradigms and aspects of SCM. Further, we examine different
literature are investigated in Section 5. The studies addressing optimization approaches to deal with uncertainty in these studies.
real-world applications are introduced in Section 6. Finally, in The papers that have addressed a SC of a real-life case study or
Section 7, a discussion, conclusions and possible future research specific industry are also discussed.
directions are explicated.
2. Scope and review methodology 3. Decision-making environments for SCND under uncertainty
In this paper, peer-reviewed articles published over the last two Several parameters of a SCND problem, such as costs, de-
decades in ISI indexed journals in the context of SCND (including mand, and supply, have inherent uncertainty. Moreover, SC net-
RL and CLSC network design as well) under uncertainty are stud- works can be affected by major man-made or natural disrup-
ied. We consider three criteria for these papers, including: (1) the tions such as floods, terrorist attacks, earthquakes, and economic
paper must be written in English; (2) one of the decision variables crises. However, these kinds of disruptions usually have a low
is location or selection of facilities from potential candidates for at likelihood of occurrence, but their impacts on SC network are
least one layer of SC; and finally, (3) at least one of the problem’s prominent.
parameters is uncertain. Published papers in international journals The objective of SCND under uncertainty is to achieve a con-
among electronic bibliographical sources including Scopus and Web figuration so that it can perform well under any possible real-
of Science have been searched by using a combination of different ization of uncertain parameters. But, this measure of perform-
keywords. ing well for different SC networks under uncertain environments
Firstly, we searched on 12 June 2015 by using keywords (sup- could be quite different according to the viewpoints of decision
ply chain network design OR strategic supply chain planning) AND makers.
(stochastic OR uncertain OR robust OR risk OR fuzzy OR reliable OR Based on the definition of different decision-making environ-
resilient), and we came up with 33 and 24 journal papers from ments by Rosenhead, Elton, and Gupta (1972) and Sahinidis (2004),
Scopus and Web of Science, respectively. Then, using wider com- uncertain environments for the SCND problem can be categorized
binations of keywords, (Supply chain OR logistic OR supply network according to the following groups:
Fig. 1. Publication date distribution of reference papers.
Fig. 2. Share of international journals with the highest contributions in publishing the reference papers.
Table 1
Scope and special features of relevant review papers.
Articles Facility location/ Scope and special features Number of shared

logistics network reference papers
design focus
Akçalı, Çetinkaya, and Üster (2009) × Network design for Reverse and Closed loop supply chains 2
Melo et al. (2009) × Facility location models in the context of SCM 16
Klibi et al. (2010) × Optimization approaches, key random environmental 7
factors and disruptive events in SCND under uncertainty
Elbounjimi, Abdulnour, and Ait-KadiI (2014) × Green closed loop supply chain network design 5
Farahani et al. (2014) × Competitive SCND 26
Eskandarpour et al. (2015) × Sustainable SCND 7
Heckmann et al. (2015) Supply chain risk 6
Govindan, Soleimani, and Kannan (2015) Reverse logistics and Closed loop supply chains 16
Group 1 (G1): Decision-making environments with random pa- Group 2 (G2): Decision-making environments with random pa-
rameters in which their probability distributions are known for the rameters in which the decision maker has no information about
decision maker. Here, these parameters are called stochastic pa- their probability distributions. Under this setting, robust optimiza-
rameters. Stochastic parameters in SCND are described by either tion models are usually developed for SCND with the purpose of
continuous or discrete scenarios. optimizing the worst-case performance of SC network. The random
In a smaller part of Group 1, the stochastic parameters are de- parameters in this decision-making group are divided into either
scribed using a known continuous probability distribution. This continuous or discrete. To model discrete uncertain parameters, the
type of SCND problem – except for simple networks with one loca- scenario approach has been used. However, for continuous uncer-
tion layer – engenders intractable optimization models. Addition- tain parameters, some pre-specified intervals are defined. This ap-
ally, the customers’ demand is the most popular stochastic param- proach is also called interval-uncertainty modeling. Optimization
eter in these studies, which is modeled through the normal distri- models for SCND under this group of decision-making environ-
bution with known mean and variance. A discussion about these ments are studied in detail in Section 5.6.
studies is provided in Section 5.2. Group 3 (G3): Fuzzy decision-making environments. In gen-
Sheppard (1974) was one of the seminal authors who used eral, there exist two types of uncertainties including ambiguity and
a scenario approach for a FL problem; gradually, this approach vagueness under the fuzzy decision-making environment. Ambigu-
has been exploited for SCND. The scenario approach leads to ity denotes the conditions in which the choice among multiple
tractable optimization models. By this approach, we can describe alternatives is undetermined. However, vagueness states the situ-
various stochastic parameters having different probability distribu- ations in which sharp and precise boundaries for some domains
tions with consideration of dependency among them. Therefore, of interest are not delineated. In this context, fuzzy mathematical
this approach is quite common for describing stochastic parame- programming handles the planner’s expectations about the level
ters (Snyder, 2006). A complete review of this group of uncertain of objective function, the uncertainty range of coefficients, and
decision-making environments is provided in Section 5.4. the satisfaction level of constraints by using membership functions
Fig. 3. Frequency of reference papers with respect to different uncertain decision-making environments.
(see Inuiguchi & Ramık, 20 0 0; Sahinidis, 20 04). The studies be- Table 2
Defined abbreviations for uncertain parameters.
longing to this group are discussed in Section 5.7.
Fig. 3 presents the frequency of reference papers according to Uncertain parameter Abbreviation
the above-mentioned uncertain decision-making environments. Demand D
Cost of activities (e.g., transportation, production) C
Capacity of network facilities/ transportation links CA
Supply quantity for network facilities S
4. SCM issues in designing SC networks
Required capacity for producing products CR
Capacity coefficients for holding products/materials in SC CS
In this section, the relevant papers are categorized based on the facilities
main aspects of SCM including the structure of network, decision Parameters of demand distribution function DP
variables, and SCM’s paradigms. Selling price of finished products P
Buying price of raw materials PR
Conversion rates of materials/components/products to process CP
other materials/components/products in network facilities.
4.1. Network structure and uncertain parameters Safety-stock levels for products in SC facilities SS
Processing/production time for network facilities PT
Transportation time through entities of SC network TT
A SC network converts raw materials into final products and Supply time for network facilities ST
then delivers them to customers. It includes various types of fa- Fuzzy goals to represent aspiration levels of multiple objectives FG
cilities, and each type plays a specific task in the network. A set of Availability of network facilities AF
facilities with the same task and type is called a layer or echelon. Availability of transportation links/modes between network’s AT
entities
A crucial aspect of SCND studies is the number and type of lay-
Disrupted products/supply/commodities in SC facilities DC
ers and the layers in which location decisions are determined. The Return quantities in a RL or CLSC network R
usual layers of SC networks are composed of suppliers, plants, dis- Disposal rate of returns in a RL or CLSC network DR
tribution centers, warehouses, and customers and the typical ma- Buying price of returns in a RL or CLSC network BP
terial flows are often from suppliers to customers. It is noteworthy Proportion of returned products/components for different PA
activities (e.g., remanufacturing, recycling, refurbishing) in a
that another issue driven by real-life applications is the necessity RL or CLSC network
to deal with multi-product problems. Profit of recycling/remanufacturing returned products in RL or PP
Regarding the material and product flows in a SC network, CLSC network
some studies have the assumption of being single-sourcing, which Selling price of RL outputs (products/components/raw SP
materials) to customers in a RL or CLSC network
means a facility or a customer can be served by only one facil-
Demand for RL outputs (products/components/raw materials) DS
ity from its upstream layer (e.g., Georgiadis, Tsiakis, Longinidis, in a RL or CLSC network
& Sofioglou, 2011; Shen & Daskin, 2005). Moreover, some stud- Financial parameters such as tax, exchange, and interest rate FP
ies have regarded the material/product flows in one layer of SC, Environmental parameters such as environmental impacts of EP
called intra-layer flows (e.g., Aghezzaf, 2005; Mousazadeh, Torabi, SC’s activities and facilities
Social parameters related to designing logistics networks PS
& Zahiri, 2015). Furthermore, direct flows from upper layers to
customers have been taken into account in the literature (e.g.,
Govindan, Jafarian, & Nourbakhsh, 2015; Vila, Martel, & Beauregard,
2007). In Fig. 4, different types of these material flows for a typical Another important feature of SCND problem is that it is some-
SC network are shown. times assumed that there is a primary structure for a SC network
In this paper, the studies related to RL network design un- and then the goal is to redesign it (e.g., Aghezzaf, 2005).
der uncertainty are also reviewed. Several studies in the rele- The most uncertain parameters that have been assumed in de-
vant literature have focused on designing only a RL network (also signing logistics networks in the reference papers are listed in
called a recovery network) and some others have integrated for- Table 2. Here, we present some abbreviations for these parameters,
ward and reverse networks, named a CLSC network. As stated by which are used in the following sections of the paper.
Melo et al. (2009), the strategic planning for RL networks has In Appendix A, the reference papers are characterized based on
many similarities with forward logistics networks. The main dif- the structure of the forward SC network in Table A.1. CLSC and RL
ferences are the type of facilities they use and the direction of network design models are categorized according to the structure
flows. In RL networks, the reverse flows are often started by col- of RL network in Table A.2. The uncertain parameters and their
lecting used and defective products from customers and their final classification on the basis of different decision-making environ-
destination is usually recovery, remanufacturing, disposal centers, ments are also illustrated in Tables A.1 and A.2. In these tables, we
or secondary markets (Keyvanshokooh, Fattahi, Seyed-Hosseini, & assign numbers to the reference papers, which have been utilized
Tavakkoli-Moghaddam, 2013). in the following sections to analyze them.
Fig. 4. A SC network structure with different types of product flows.
Fig. 5. Frequency of uncertain parameters in the forward logistics network of reference papers.
Fig. 6. Frequency of uncertain parameters in the RL network of reference papers.
By analyzing tables in Appendix A, we highlight many key facts and about 70% of them have explored SCND problem without con-
about logistics network design models under uncertainty. One of sideration of RL activities.
the most significant factors is the frequency of uncertain parame- In optimization problems under uncertainty, decision-making
ters assumed in designing forward and RL networks, which is il- environments depend on available information for uncertain pa-
lustrated by Figs. 5 and 6, respectively. rameters and their source of uncertainty. Klibi et al. (2010) in-
In Table 3, the forward SC and CLSC network design models are vestigated different existing uncertainties in SC as well as their
categorized according to the forward network structure and the sources and impacts. Here, G1 and G2 have the highest and low-
type of decision-making environment under uncertainty. Table 4 est frequencies among the reference papers’ decision-making en-
represents this classification for the reverse and CLSC network de- vironments, respectively. Moreover, a few papers have assumed
sign models based on the RL network features. Here, the network combined uncertain decision-making environments to model their
features include the number of commodity and the number of lay- SC network on the basis of type and features of their uncertain
ers in which location decisions are specified. This idea of classifi- parameters (e.g., Keyvanshokooh, Ryan, & Kabir, 2016; Sadghiani,
cation has been gained from Melo et al. (2009). Torabi, & Sahebjamnia, 2015; Torabi, Namdar, Hatefi, & Jolai, 2016;
From Tables 3 to 4, we can conclude that most reference papers Vahdani, Tavakkoli-Moghaddam, Modarres, & Baboli, 2012).
have considered single or two location layers. A few papers have Among the reference papers, about 19% of them have addressed
dealt with RL or CLSC network design problem under uncertainty SCND problem with disruption. The influences of disruptions on
Table 3
Classification of SC and CLSC network design models based on the decision-making environment and features of forward logistics network.
G1 G2 G3
1 location layer Single commodity [3,4,5,8,9,10,11,13,15,18,19,20,21,22,23,24,29,33,34,42,44,45,50, [66] [53,81,128]

54,55,57,61,62,63,67,70,72,73,75,86,87,88,90,96,
100,101,104,105,107,112,113,121,122,130,143]
Multiple [6,17,25,28,35,38,51,68,69,71,78,80,84,89,99,108, [79,152,154] [99,138,139,153]
commodities 124,139,144,145,153]
2 location layers Single commodity [36,40,46,74,85,114,115,118,120,126,127,137,149,150,156] [133,137,146,156] [27,77,82,94,110,146,149,150,151]
Multiple [1,2,7,12,26,32,37,43,47,48,52,56,58,59,60,64,91,93,95,98, [92,159] [31,65,116,123,131]
commodities 109,125,136,159]
3 location layers Single commodity [106,155] [41,103]
Multiple [14,16,30,39,76,97,111,132,134,157] [141,148,157] [140,142]
commodities
>3 location layers Single commodity [49]
Multiple [129] [158]
commodities
Table 4
Classification of RL and CLSC network design models based on the decision-making environment and features of RL network.
G1 G2 G3
1 location layer Single commodity [23,70,162,164] [81,128,135,163]

Multiple commodities [25,38,83] [79, 83,148, 160] [65,83,167]
2 location layers Single commodity [85,156, 161,165] [156] [110]
Multiple commodities [26, 28,47,84,91,99,102,139,147,168] [92,154] [99,102,123,138, 139]
3 location layers Single commodity [40,137, 149, 150] [137,146, 166] [53, 119,146,149,150,151]
Multiple commodities [97,169, 170] [117]
>3 location layers Single commodity
Multiple commodities [129,134]
the physical structure of a SC network may result in having un- long to the operational planning level, which are rarely integrated
certainty in some parameters. Facilities’ capacity, availability of with SCND under uncertainty in the related literature.
facilities and their connections, and amount of disrupted prod- Distribution networks, often the ending part of a SC network,
ucts in SC facilities are the most frequent parameters, which have consist of products flows from depots to customers or retailers.
been assumed uncertain because of disruption events. It must be The design of such network requires solving two hard combina-
noted that disruptions can deeply fluctuate costs, demand and torial optimization problems including determining the depots’ lo-
supply parameters, which should be of more interest to future cations and vehicle routes to serve customers. For the first time,
researchers. Salhi and Rand (1989) revealed numerically that solving the FL
and routing problems separately leads to suboptimal solutions.
4.2. Planning horizon and decisions for SCND Then, the location-routing problem gained substantial attention.
Recently, Prodhon and Prins (2014) presented a survey paper in
Due to the complexity of SC networks in today’s business en- this area. In the context of SCND under uncertainty, Ahmadi-Javid
vironment, it is important to consider several planning decisions and Seddighi (2013), Javid and Azad (2010), and Azad and Davoud-
along with the classical location-allocation decisions to achieve pour (2013) addressed the FL and routing decisions simultaneously
an integrated system. These planning decisions remain constant under uncertainty.
for different time spans and may be divided into three cate- In the majority part of literature, the decisions have been made
gories, including strategic (long-term), tactical (mid-term), and for a single period. As explained by Melo et al. (2009), these single-
operational (short-term) level decisions according to their time period SCND models may be enough to obtain a robust configura-
spans. tion for a network and also a robust set of operational and tactical
In the strategic level, there are usually several crucial SC de- decisions. Moreover, another part of the literature has addressed
cisions to be made such as the number, locations, and capacity SCND problem with a planning horizon including multiple peri-
of facilities. While it depends entirely on the nature of the SC, ods. In these studies, the periods can be divided into (1) tacti-
strategic decisions typically hold for about three to five years. Tac- cal/operational time periods, or (2) strategic time periods.
tical decisions are usually made for three months to three years In the studies with multiple tactical or operational periods (e.g.,
and operational decisions (e.g., vehicle routing decisions) are often Schütz, Tomasgard, & Ahmed, 2009; Tsiakis, Shah, & Pantelides,
constant for one hour to one trimester (Vidal & Goetschalckx, 2001), strategic decisions are made at the beginning of planning
1997). It should be noted that holding these decisions for a cer- horizon while tactical or operational decisions, such as products al-
tain time span is mostly dependent on the nature of SC and thus location to customers and inventory levels, are able to be changed
it can vary for different SCs. in different periods throughout the planning horizon.
Fig. 7 illustrates different SC decisions (except location- In addition, some studies consider the possibility of applying
allocation, production, and inventory decisions that are considered future adjustments in the SC strategic decisions. These kinds of ad-
in the majority of the related literature), which have been deter- justments are typically made for location and/or capacity of facili-
mined in SCND problems. ties, for example, due to unstable condition of target markets, ex-
As shown by Fig. 7, the decisions associated with different plan- pansion opportunities for new markets, and budget limitations for
ning levels are taken into account in the related literature. How- investments. Thus, a planning horizon divided into several strate-
ever, several decisions such as products’ price and routing deci- gic periods is assumed (e.g., Aghezzaf, 2005; Nickel, Saldanha-da-
sions have been addressed by a few studies. Pricing decisions are Gama, & Ziegler, 2012).
usually put at the tactical planning level and routing decisions be-
Fig. 7. Main planning decisions (except location-allocation, production, and inventory) in the reference papers.
cilities can be closed, opened, or reopened more than once over a

planning horizon. Further, expanding, reducing, or relocating facil-
ities’ capacities are another key issue. Melo, Nickel, and Da Gama
(2006) investigated different approaches to make capacity planning
for a deterministic dynamic FL problem. However, the papers that
addressed these concerns in multi-period SCND problem under un-
certainty are still scarce. It is worth mentioning that a limited
number of studies in deterministic SCND problems (e.g., Correia
& Melo, 2016; Fattahi, Mahootchi, & Husseini, 2016; Fattahi, Ma-
hootchi, Govindan, & Husseini, 2015; Salema, Barbosa-Povoa, & No-
vais, 2010) have used a planning horizon including interconnected
strategic and tactical periods, but no study has yet regarded this
issue under an uncertain environment.
4.3. Risk management in SCND problem
Risk management in SCM has gained considerable attention in

both practice and academia recently. Unfortunately, there is not a
clear and comprehensive consensus for definition of supply chain
risk. Sodhi, Son, and Tang (2012) explored researchers’ perspectives
in this area and emphasized that their perspectives are widely
diverse. Moreover, Heckmann, Comes, and Nickel (2015) asserted
that no unique definition has been provided for the SC risk. Fur-
ther, the term risk is still a rather vague concept and generally,
risk comprehension is based on the fear of losing (business) value.
Fig. 8. Frequency of reference papers in terms of their planning horizon. Heckmann et al. (2015), after examining various relevant research
works, defined the supply chain risk as the potential loss for a
Fig. 8 classifies the SCND models under uncertainty that con- SC in terms of its objectives caused by uncertain variations in SC
sidered a planning horizon with multiple strategic periods or mul- features due to occurrence of triggering-events. Further, they pro-
tiple tactical/operational periods. It also compares the frequency of vided some major characteristics of SC risk that one can refer to
single-period SCND models with multiple-periods ones. It can be this study for more details.
drawn from Fig. 8 that most SCND models under uncertainty are In SCND problem under uncertainty, consistent with a pre-
single-period. sented classification by Tang (2006a), SC risks can be divided into
There exist some practical features related to SCND problems operational and disruption risks based on the source of uncertain-
with multiple strategic periods. Sometimes, it is presumed that fa- ties. As pointed out by Behdani (2013) and Snyder, Atan, Peng,
Table 5
Reference papers dealing with operational or disruption risks in SCND problem under uncertainty.
Reference papers Share (%)
Operational risks Azad and Davoudpour (2013), Azaron, Brown, Tarim, and Modarres (2008), Baghalian et al. (2013), Franca et al. (2010), Gebreslassie, Yao, 14%
and You (2012), Goh et al. (2007), Guillén et al. (2005), Guillén, Mele, Bagajewicz, Espuña, and Puigjaner (2003), Huang and
Goetschalckx (2014), Jabbarzadeh et al. (2014), Jin et al. (2014), Kara and Onut (2010b), Kazemzadeh and Hu (2013), Madadi, Kurz,
Taaffe, Sharp, and Mason (2014), Nickel et al. (2012), Pan and Nagi (2010), Pasandideh, Niaki, and Asadi (2015), Ramezani, Bashiri, and
Tavakkoli-Moghaddam (2013a), Sabio, Gadalla, Guillén-Gosálbez, and Jiménez (2010), Sadghiani et al. (2015), Soleimani and Govindan
(2014), Soleimani, Seyyed-Esfahani, and Kannan (2014), and Govindan and Fattahi (2017)
Disruption risks Jabbarzadeh, Naini, S., Davoudpour, and Azad (2012), Mak and Shen (2012), Ahmadi-Javid and Seddighi (2013), Azad et al. (2014), Baghalian 5%
et al. (2013), Jabbarzadeh et al. (2014), Klibi and Martel (2012a), Klibi and Martel (2013), Noyan (2012), and Sadghiani et al. (2015)
Rong, Schmitt, and Sinsoysal (2016), supply chain disruption is an 4.5. Different paradigms in SCM
event that may occur in a part of SC due to natural disasters (e.g.,
earthquakes and floods) or through intentional/unintentional hu- In a SC, the initial goals include meeting demand of customers,
man actions (e.g., war and terrorist attacks), which have unde- functionality of SC’s processes, and accessibility of SC’s resources
sired effects on SC’s goal and performance. Moreover, the opera- (Heckmann et al., 2015). SCND was seeking traditionally to achieve
tional risks are rooted in intrinsic uncertainties of SC, such as un- these goals economically. However, the business goals of a com-
certainty in supply, demand, lead-time, transportation times and pany affect its SCND problem and, in fact, a suitable design of SC
costs. This risk type usually has no influence on functionality of network enables the company to attain its goals and competitive
SC’s elements, while it affects the operational factors, which are advantages. If a corporation wants to become successful in today’s
basically assumed to be uncertain. However, the disruption risks market, both its SC and competitive strategies should fit together
evoked by SC disruptions can affect functionality of SC’s elements to have aligned goals. Over the last decade, various paradigms have
either completely or partially for uncertain time duration. been proposed in SCM that influence designing a SC network. In
In Table 5, the studies that dealt with risk management (either this section, we explore these paradigms briefly.
operational or disruption risk) in the context of SCND problem un-
der uncertainty are classified.
4.5.1. Responsive SCND
In most studies in Table 5, risk measures have been utilized in
Besides economic goals, several companies consider responsive-
an optimization problem to cope with the existing risk. We discuss
ness of their SC as another goal to attain competitive advantages.
these risk measures in detail in Section 5.5.
Different definitions exist for the SC responsiveness: the ability
of a SC to produce innovative products, meet short lead-times,
4.4. Resilient SCND
cope with a wide range of products, and meet a high service level
(Chopra & Meindl, 2013). Gunasekaran, Lai, and Cheng (2008) de-
It is crucial to regard SC disruptions while designing a SC net-
fined the SC responsiveness as a paradigm that has emerged in re-
work since there are a few recourses for making strategic decisions
sponse to the volatile and competitive business environment; thus,
when a disruption happens. However, firms can adjust their tac-
a responsive SC has to be highly flexible to changes of market or
tical and operational decisions under disruptions. Planning for SC
customer requirements.
networks with disruptions was studied by Snyder, Scaparra, Daskin,
In a optimization problem for designing responsive SC net-
and Church (2006) in terms of mathematical modeling. This issue
works, several studies considered objective functions such as min-
is discussed on Section 5.8.
imizing service time of customers (e.g., Cardona-Valdés, Álvarez, &
For a SC under uncertainty, there exist a number of strategies
Ozdemir, 2011; Mirakhorli, 2014; You & Grossmann, 2011), maxi-
that can be utilized to manage the risk associated with disruptions.
mizing fill rate of customers’ demands (e.g., Shen & Daskin, 2005),
In accordance with Tomlin (2006), mitigation strategies are those
and minimizing lateness of products’ delivery to customers (e.g.,
where a SC takes some preventive actions in advance of a disrup-
Pishvaee & Torabi, 2010). Fig. 9 represents the studies that dealt
tion and also pays their related costs regardless of whether a dis-
with responsive SCND models under uncertainty. Recently, Fattahi,
ruption takes place, while contingency strategies are those where
Govindan, and Keyvanshokooh (2017) presented a stochastic model
a SC takes several actions merely when a disruption happens with
for designing responsive and resilient supply chain networks with
the aim of returning SC to its original condition. As pointed out by
delivery lead-time sensitive customers.
Christopher and Peck (2004) and Tang (2006a), resilience is a sys-
tem or firm’s capability to return to its initial condition or even to
a more desirable state after disruption. In SCM, this ability is di- 4.5.2. Green SCND
rectly affected by SC resources and design of its network. Indeed, The increasing importance of environmental issues for SCs has
a resilient supply chain network should operate efficiently both nor- resulted in integrating different environmental factors in SCND
mally and in the face of a disruption. Regarding resilient SCND un- models instead of only focusing on pure economic models. This in-
der disruption events, a few papers employed mitigation strategies. tegration can be applied as either environmental measures in ob-
These strategies are discussed in detail on Section 5.8. jective functions or environmental constraints in the mathematical
Measuring the resiliency of SCs is still a questionable task and model. Green SCND is another paradigm that aims to merge eco-
different resilience indicators have been defined in the existing lit- nomic and environmental goals/factors in designing SC networks.
erature. In this regard, Cardoso, Barbosa-Póvoa, Relvas, and Novais Fig. 9 specifies studies that regarded environmental concerns. It is
(2015) investigated the performance of different resilience met- worth noting that the effects of SC activities on the environment
rics and indicators for various types of SC networks and Spiegler, have been considered as uncertain parameters in Guillén-Gosálbez
Naim, and Wikner (2012) presented an assessment framework of and Grossmann (2010), Guillén-Gosálbez and Grossmann (2009),
resilience. In fact, the choice of approaches for designing resilient Pishvaee, Razmi, and Torabi (2014), Pishvaee, Torabi, and Razmi
SC networks is contingent upon many factors such as availability (2012), and Babazadeh, Razmi, Pishvaee, and Rabbani (2017).
of financial resources, network structure, risk preference of deci- Furthermore, mitigating the environmental disruptions via
sion maker, and so on. wastes of used products is another significant environmental issue
Fig. 9. Classification of different paradigms in SCND problem under uncertainty.
(Farahani et al., 2014). In this regard, many researchers (see stud- 4.7. Other SC characteristics
ies in Table A.2 of Appendix A) have studied designing RL networks
for recovery of used products. In this section, two important issues regarding SCND problem
are briefly discussed. It should be emphasized that these presented
facets have not been widely investigated in the related context.
4.5.3. Sustainable SCND
Financial factors: There are a limited number of papers in the
A definition for sustainable development was made by the World
area of SCND under uncertainty in which financial factors are taken
Commission on Environment and Development (WCED) as "a de-
into account. International financial factors have strong impact on
velopment that satisfies present needs without compromising the
the structure of global SCs and several studies, such as Goh, Lim,
capability of future generations to meet their own resources and
and Meng (2007) and Hasani, Zegordi, and Nikbakhsh (2015), dealt
needs" (Brundtland, 1987). As mentioned by Farahani et al. (2014),
with this issue. As the second category, a few studies such as
sustainable SCs play an essential role in conserving natural re-
Longinidis and Georgiadis (2013) and Longinidis and Georgiadis
sources for the next generation and gaining the attention of many
(2011) assumed that the financial cycle of a corporation is also af-
researchers over recent years. Based on this paradigm, several
fected by the operations related to its SC; hence, they presented
scholars have tried to design SC networks consistent with eco-
financial operation constraints to model the financial cycle. In the
nomic aspects, environmental performance, and social responsibil-
last category, budget constraints are embedded into SCND prob-
ity that are called sustainable SCND (Eskandarpour, et al., 2015). We
lem to limit investment on designing SCs. In this regard, Nickel
have identified that the majority of studies in this area presumed a
et al. (2012) considered budget constraints for designing a SC un-
deterministic decision-making environment such as Mota, Gomes,
der stochastic demand and interest rates. They also presumed that
Carvalho, and Barbosa-Povoa (2015) and You, Tao, Graziano, and
there are different alternative investment options and thereby im-
Snyder (2012). Recently, Eskandarpour et al. (2015) have presented
posing a target for the return on investment.
a survey on sustainable SCND and investigated existing approaches
Moreover, there are a few reference papers in which financial
for assessment of the environmental impact and social responsibil-
parameters such as tax, exchange, and interest rates are assumed
ity performance of SCs.
to be uncertain. These studies include Goh et al. (2007), Nickel et
In Fig. 9, the reference papers based on the above-mentioned
al. (2012), and Longinidis and Georgiadis (2013).
paradigms are categorized. It should be noted that in Fig. 9, the
Competition: Recently, Farahani et al. (2014) presented a survey
studies that have considered environmental issues directly in their
paper on competitive SCND. In general, the competitive environ-
constraints or objective function(s) are reported and we do not re-
ments for designing a SC network can be categorized into three
port all studies related to RL and CLSC.
primary groups: (1) competition among facilities in the same ech-
From Fig. 9, a small percentage of papers (about 19%) have ad-
elon of SC, (2) competition among facilities in different echelons
dressed the responsiveness goals, environmental performance or
of SC, and (3) competition among multiple SCs. However, the un-
social responsibility. Further, Pishvaee et al. (2014) and Dayhim, Ja-
certain models that addressed FL under a competitive environment
fari, and Mazurek (2014) among the reference papers of our study
are presented only in the context of pure FL, so this area has a high
regarded the social responsibility and environmental performance
potential for future research directions.
concurrently for designing a sustainable SC network under uncer-
tainty.
5. Optimization under uncertainty for SCND
4.6. Humanitarian SCND In this section, optimization aspects of the related literature are
investigated in separate subsections. Moreover, the reference pa-
Studies in SCND are not limited only to business SCs. Non- pers belonging to Groups 1, 2, and 3 (based on the definitions in
business SCs such as public and governmental ones have been Section 3) are studied in terms of mathematical modeling, solution
much attracted over recent years (e.g., Jabbarzadeh, Fahimnia, & methods, and optimization techniques.
Seuring, 2014; Jeong, Hong, & Xie, 2014; Liu & Guo, 2014; Noyan,
2012). A humanitarian SC, also called relief SC, often designed to 5.1. Optimization criteria for evaluation of SC networks’ performance
alleviate suffering of vulnerable people in the event of a disaster
or even after that, is one of the most popular non-business SCs. To design a SC network under uncertainty, single or multiple
As pointed out by Najafi, Eshghi, and Dullaert (2013), a disaster is objectives are often considered for a numerical optimization pro-
an event that often leads to destruction, damage, human suffering, cedure based on SC goals. Heckmann et al. (2015), in accordance
loss of human life, and/or deterioration of health service. Human- to Borgström (2005), defined efficiency as "a way to attain the SC’s
itarian logistics network design is usually placed in the category goals through taking minimal resources and thereby achieving the
of pre-disaster planning; naturally, it is under uncertainty associ- cost-related advantages." Further, they defined effectiveness as "ob-
ated with the impact of different types and magnitude of disasters taining pre-determined SC goals even in the face of inverse condi-
(Özdamar & Ertem, 2015) . It should be noted that optimization tions or unexpected events."
approaches for pre-disaster FL are reviewed by Caunhye, Nie, and In SCND, most studies have assumed a single objective function
Pokharel (2012). for their optimization models, which usually seeks to achieve eco-
Table 6
Objective function’s terms in logistics network design under uncertainty.
Objective function terms Explanation Abbreviation
Location costs of facilities The fixed costs of opening/closing facilities. The fortification costs of facilities are put in this category as well. C1
Further, some papers utilized a single parameter for both opening and operating costs of facilities, and so
we have also used C1 for this case. In a few studies, closing facilities led to cost saving in the objective
function that are represented by C1’.
Operating costs of active facilities The operating costs of facilities after opening them. In some studies, facilities’ operating cost is assumed as a C2
fixed cost and in some others, it depends on the volume of products, which a facility can handle based on
its capacity. Moreover, in some studies some fixed costs for active facilities are considered based on the
products they handle or the processes they perform. We put these fixed costs in this category as well.
Inventory costs The holding costs of working inventory, safety stock, or extra inventory in SC facilities are regarded as C3
inventory costs.
Transportation/shipment costs The transportation or shipment costs of products among different entities of a SC network. Moreover, the fixed C4
shipment costs are considered in some studies.
Production/manufacturing costs The costs of producing or manufacturing products in entities of a SC network. C5
Processing costs in facilities The costs of handling products in warehouses, distribution centers, or other facilities of a SC network. C6
Capacity costs of facilities The costs of establishing, expanding, or relocating the capacity of different facilities in a SC network. C7
Procurement costs The costs of procuring raw materials, required components or finished products from corresponding suppliers. C8
Further, the buying costs of used products in a CLSC or RL network are put in this category.
Fixed ordering costs The fixed costs of placing an order from a SC facility to another one. C9
Supplier selection costs The fixed costs for selecting the suppliers, which include establishing business with them. C10
Technology selection costs The costs of selecting the technology for SC’s facilities. C11
Costs of selection/establishment The costs of establishing transportation links. C12
transportation links
Capacity costs of transportation links The costs of establishing or expanding capacity of transportation links in a SC network. C13
Shortage/backorder costs The penalty costs related to not satisfying the customers’ needs. Back order costs are also considered in this C14
category.
Sales tax costs The costs related to the tax of sales’ products. C15
Recovery activities costs The costs related to recovery activities in a RL network, which may include inspection, recycling, C16
remanufacturing, repairing, or disposal costs. These costs are dependent on the type of activities in a RL
network.
Routing costs The costs related to transporting the products from one layer of a SC network to another one, which are C17
calculated based on routing decisions.
Penalty costs in RL networks The penalty costs related to not collecting the returned products in a RL network. C18
Cost saving from integrating facilities The cost saving due to integrating some facilities in a CLSC network. C19
Penalty costs for not utilizing installed The penalty costs related to not utilizing the existing capacity in SC’s facilities C20
capacities
Salvage values of products The salvage values of unsold products in SC’s facilities. SA
SC’s income The income of SC network, usually calculated as multiplication of the amount of sold products and their I
related prices.
SC’s responsiveness Different criteria exist for defining the responsiveness of a SC network, which has been discussed in Section R
4.5.1. We put all these criteria in this category.
SC’s flexibility There are many criteria for measuring the flexibility of a SC network in the related literature. We put all these F
criteria in this category.
SC’s environmental impacts The effects of a SC network on the environment are often measured as its environmental impacts, which may E
include different terms.
SC’s social responsibility The influences of a SC network on the social issues are measured as its social responsibility, which may S
include different terms.
Risk/Robustness measures Some studies have regarded the risk or robustness measures in their objective functions. M
nomic goals for SC in terms of either cost minimization or profit 5.2. SCND problems with continuous stochastic parameters
maximization (Melo et al., 2009). In the profit maximization, a SC’s
profit is calculated based on revenues minus costs. Sometimes, par- Daskin, Coullard, and Shen (2002) developed a location-
ticularly for designing a global SC, the after-tax profit is presumed inventory model for the situation where retailers’ demands have
as an objective function (e.g., Goh et al., 2007). Moreover, for a normal distribution with known daily mean and variance. In re-
profit-maximization problem, it is often not necessary to serve all sponse to the retailers’ demands, distribution centers (DCs) fol-
potential customers; indeed, SC prefers to lose some potential cus- low the inventory policy (Q, r) for ordering their required products
tomers whose service costs are high compared with their revenues from a plant. Both the reorder point and safety stock are spec-
(Melo et al., 2009). ified so that the stock-out probability is not greater than a pre-
To measure SC’s performance in terms of economic goals, a determined value. The final mixed-integer nonlinear programming
SC’s costs are usually made of some components like inventory (MINLP) model is solved by Lagrangian Relaxation (LR) embed-
costs, transportation costs, FL costs and so on. These components ded into the Branch and Bound (B&B) algorithm. This problem is
can be different in various optimization problems and have direct also solved using column generation by Shen, Coullard, and Daskin
relation with the planning decisions. We provide a list of these (2003). The paper presented by Daskin et al. (2002) has been put
components used in the objective functions of reference papers in as a foundation for many studies in the area of SCND where the
Table 6. retailers’ demands have normal distribution with known mean and
Besides the economic goals, some studies consider other objec- variance (e.g., Park, Lee, & Sung, 2010; Shen & Daskin, 2005).
tives in this area. Usually, these studies result in multi-objective In complex SCND models with more than one location layer,
optimization problems. In Table 6, other types of common objec- where location decisions are made along with other strategic or
tives are also listed. In the following sections, we present objective tactical planning decisions, assuming continuous distribution func-
function(s) of reference papers based on Table 6. tion for stochastic demand often results in intractable nonlinear
problems. In such a SCND problem, the solution approaches pro- been developed in a few research studies, such as Guillén-Gosálbez
posed by Daskin et al. (2002) and Shen et al. (2003) based on the and Grossmann (2009), You and Grossmann (2008a), and Vahdani
structure of mathematical models are not applicable. In fact, few et al. (2012).
papers coped with this issue.
Another popular situation of modeling continuous stochastic 5.4. Scenario-based stochastic programs for SCND
parameters is the case where the availability or reliability of fa-
cilities (e.g., Cui, Ouyang, & Shen, 2010; Qi & Shen, 2007) or In this category of SCND problem under uncertainty, stochas-
transportation links (e.g., Azad, Davoudpour, Saharidis, & Shiripour, tic parameters are usually modeled via a set of discrete sce-
2014) are considered with a pre-determined probability. Typically, narios with known probabilities. Here, the problems are divided
the aim of these studies is to design a reliable or resilient SC net- into two main groups: (1) two-stage stochastic programs and (2)
work against disruption events. Several models in this area are in- multi-stage stochastic programs (Birge & Louveaux, 2011). Both
vestigated by Snyder and Daskin (2007) and Snyder et al. (2006). approaches have been employed for SCND problems. As stated
In Table 7, SCND models with continuous stochastic parameters are by Snyder (2006), there are some difficulties in using these ap-
categorized according to their solution approaches, mathematical proaches to design a SC network. First, creating scenarios and ob-
models, and objective functions. taining their associated probabilities could be a problematic and
It is worth noting that, the LR algorithm is categorized as a cumbersome task, especially in real-life SCND problems. Second,
heuristics approach in this paper. However, some studies utilized an adequate number of scenarios could lead to a large-scale opti-
the LR algorithm embedded in the B&B algorithm (e.g., Daskin mization problem.
et al., 2002), which guarantees achieving the optimal solution;
thus, this method, called LR-based exact algorithm, is characterized 5.4.1. Two-stage stochastic programs
as an exact solution approach. Two-stage stochastic programs are quite popular due to the
As shown by Table 7, the variety of stochastic parameters that two-stage nature of decisions in SCND problems. Indeed, SC strate-
have been modeled continuously in SCND is limited. Further, most gic or long-term decisions such as location and capacity should be
existing models are MINLP and due to the structure of the mathe- made before knowing the realization of random parameters as the
matical models, the LR algorithm has been widely used compared first-stage decisions. However, when random parameters are dis-
with other solution approaches. closed, the operational and tactical decisions such as inventory,
production, transportation and routing have to be determined as
5.3. Chance-constrained programming for SCND the second-stage decisions. The general formulation of a two-stage
stochastic program can be presented as:
Sometimes, in optimization problems, one or multiple con-
Min cT x + Q (x ), (1)
straints are not required to be always satisfied. Indeed, these con- x∈X
straints need to be held with some probability or reliability level.
where c ∈ Rn1 is a known vector, x ∈ Rn1 is first-stage decisions vec-
Probabilistic or chance-constrained programming is usually applied
tor, X ⊂ Rn1 is a non-empty set of feasible combinations for first-
to model such a situation and it is often employed when the dis-
stage decisions, and Q (x ) is a recourse function. Here, first-stage
tribution probabilities of the uncertain parameters are known for
decisions are made by considering the effect of stochasticity, mea-
decision makers. Consider A, x, and b are m × n matrix, n-vector,
sured by this recourse function.
and m-vector, respectively. Let Ax ≥ b be a deterministic linear
In two-stage stochastic program (1), if we assume ζ as the
constraint in which x is decision variables vector. Assuming uncer-
stochastic parameters vector with finite and discrete support, it can
tainty for matrix A and right-hand side vector b, then P (Ax ≥ b) ≥
be expressed as a finite number of realizations, called scenarios.
α is a probabilistic linear constraint saying that Ax ≥ b should be
Here, S is a set of all scenarios and |S| is the number of scenar-
satisfied with a pre-specified probability α ∈ (0, 1 ).
ios. Then, ζ s , ∀ s ∈ S, is a given realization of stochastic parameters,
As pointed out by Laporte, Nickel, and da Gama (2015), there
and set {ζ 1 , ζ 2 , ..., ζ |S| } is the sample space for stochastic parame-
exists a particular case of chance-constrained FL problem with
ters with corresponding probabilities π 1 , π 2 , ..., π |S| . The recourse
stochastic demand. Let I and J be sets of potential locations for
function can be defined as:
facilities and demand nodes, respectively. The decision variable
xi j (i ∈ I, j ∈ J ) equals to one if customer j is assigned to facility Q (x ) = Eζ (Q (x,ζ s ) ) = π s × Q (x,ζ s ). (2)
i, and yi (i ∈ I ) equals to one if facility i is opened. The stochastic s∈S
demand of customer j (d j ) follows a pre-specified probability dis- For a given scenario s, the optimal objective function value of
tribution. To guarantee that the amount of demand assigned for the second-stage problem is:
each facility i with known capacity qi does not exceed the facil-
Q (x, ζ s ) = min ( qs ) ys : W s ys = hs − T s x, ys ≥ 0 .
T
ity’s capacity with a pre-determined probability αi , the following s
(3)
y
probabilistic constraints should be considered:
where ys ∈ Rn2 , ∀ s ∈ S is the second-stage decisions vector for
scenario s. Further, for each scenario s, qs ∈ Rn2 ,W s ∈ Rm1 ×n2 ,T s ∈
P d j xi j ≤ qi yi ≥ αi , i ∈ I
Rm1 ×n1 , and hs ∈ Rm1 are a realization of stochastic components,
j∈J
which can be pieced together as ζ s = (qs ,W s ,T s , hs ) (Birge & Lou-
The most challenging issue is to attain a deterministic equiv- veaux, 2011).
alent formulation for chance-constrained programs. For example, Here, second-stage problem (3) is written for a general case
Lin (2009) obtained a deterministic equivalent formulation for a FL where all components q, W ,T , and h are assumed to be stochas-
problem with the above type of probabilistic constraints in which tic. Nonetheless, in a SCND problem, only one or multiples of these
customers’ demands are independent and follow Poisson or Gaus- components may be stochastic consistent with its assumptions. In
sian probability distribution. Table 8, scenario-based stochastic programs in the area of SCND
Note that it is not always straightforward to convert probabilis- problems are investigated in terms of optimization aspects.
tic constraints into their equivalent deterministic ones (see Birge It is worth mentioning that several studies (e.g., Georgiadis
and Louveaux (2011) and Sahinidis (2004) for more details about et al., 2011; Schütz et al., 2009) modeled their stochastic problems
this issue). In SCND problem, these probabilistic constraints have in such a way that the second stage includes multiple periods and,
Table 7
Solution approach and specifications of the mathematical model for problems with continuous stochastic parameters.
Articles Solution approach Mathematical Continuous Objective

model stochastic
Exact algorithm Heuristic algorithm Meta-heuristic Commercial
parameters
solver
Sabri and Beamon (20 0 0) An iterative approach MINLP D, ST, PT Max F, Min
by solving two (C1+C3+C4+C6+C8)
sub-models
Daskin et al. (2002) LR-based exact MINLP D Min (C1+C3+C4+C9)
algorithm
Hwang (2002) Improved Genetic MILP AF Min C1+ Min C17
Algorithm (GA)
Shen et al. (2003) Column generation MINLP D Min (C1+C3+C4+C9)
Miranda and Garrido LR algorithm MINLP D Min (C1+C3+C4+C9)
(2004)
Shen (2005) LR-based exact MINLP D Min (C1+C3 or
algorithm C11+C4+C9)
Shen and Daskin (2005) GA MINLP D Min(C1+C3+C4+C9), Max
R
Avittathur, Shah, and Gupta GAMS [1]
MINLP D Min(C1+C3+C4+C15)
(2005)
Shu, Teo, and Shen (2005) Column generation MINLP D Min(C1+C3+C4+C9)
Romeijn, Shu, and Teo Branch & Price MINLP D Min (C1+C2+C3+C4+C9)
(2007) algorithm
Lieckens and Vandaele GA MINLP Inter-arrival Max(I-C1-C3-C4-C14-C16-
(2007) time of C18)
returns, PT
Qi and Shen (2007) LR algorithm[2] MINLP D, AF Max(I+SA-C1-C3-C4-C9-
C14)
Shen and Qi (2007) LR-based exact MINLP D Min(C1+C3+C4+C9)
algorithm
Shen (2007a) [3]
Column generation MINLP D Min(C1+C3+C4+C9)
Miranda and Garrido LR algorithm MINLP D Min(C1+C3+C4+C9)
(2008)
You and Grossmann A heuristic based on MINLP D Max(I -C1-C3-C4
(2008a) the model’s -C6-C7-C8-C11-C12), Max R
convexification
You and Grossmann LR algorithm MINLP D Min(C1+C3+C4+C9)
(2008b)
Tanonkou, Benyoucef, and LR algorithm MINLP D, ST Min(C1+C3+C4+C9)
Xie (2008)
Rappold and Van Roo A two-step heuristic MINLP D, PT Min(C1+C3+C4+C7+C14)
(2009) by fixing binary
variables
Guillén-Gosálbez and A decomposition MINLP EP Max(I-C1-C3-C4-C6-C7-C8-
Grossmann (2009) method based on C11-C12), Min
outer approximation E
You and Grossmann (2009) LR algorithm MINLP D Min(C1+C3+C4+C9)
Javid and Azad (2010) Hybrid tabu search MINLP D Min(C1+C3+C4+C9+C17)
(TS) & simulated
annealing (SA)
Qi et al. (2010) LR-based exact MINLP D, AF Min(C1+C3+C4+C9+C14)
algorithm
Park et al. (2010) LR algorithm MINLP D Min(C1+C3+C4+C9)
Guillén-Gosálbez and A heuristic by using MINLP EP Max (I-C1
Grossmann (2010) spatial B&B -C3-C4-C6-C7-C8
-C11-C12), Max
(Environmental
performance)
You and Grossmann (2010) Piece-wise linear MINLP D Min(C1+C3+C4)
approximation & LR
algorithm
Nasiri, Davoudpour, and LR algorithm MINLP D Min(C1+C3+C4+C7 +C9)
Karimi (2010)
Cui et al. (2010) LR-based exact MINLP[4] AF Min(C1+C4)
algorithm
You and Grossmann (2011) GAMS MINLP D Min (C1+C3+C4), Min
(Customers’ service time)
Abdallah, Diabat, and GAMS MINLP D, R Min(C1+C3+C4+C9)
Simchi-Levi (2012)
Vahdani et al. (2012) GAMS MILP AF Min(C1+C4+C5+C6+C16),
Min(Disruption cost)
(continued on next page)
Table 7 (continued)
Articles Solution approach Mathematical Continuous Objective

model stochastic
Exact algorithm Heuristic algorithm Meta-heuristic Commercial
parameters
solver
Benyoucef et al. (2013) LR algorithm MINLP D, ST Min(C1+C3+C4+C8+C9)

Kumar and Tiwari (2013) LR algorithm MINLP D Min(C1+C3+C4+C5+C9)
Azad and Davoudpour Hybrid TS & SA MINLP D Min(C1+C4+C6+C7+C17),
(2013) Min M
Baghalian et al. (2013) LINGO MINLP[5] D Max(I-C1-C3-C4-C5-C6-
C14+S), Min
M
Vahdani, GAMS MILP AF Min(C1+C4+C5+C6+C16),
Tavakkoli-Moghaddam, Min(Disruption cost)
and Jolai (2013)
Vahdani, GAMS MILP AF Min(C1+C4+C5+C6+C16),
Tavakkoli-Moghaddam, Min(Disruption cost)
Jolai, and Baboli (2013)
Li et al. (2013) LR algorithm MINLP AF Min(C4)
Azad et al. (2013) Benders’ MILP CA, AT Min(C1+C4+ Disruption
decomposition cost)
Nasiri, Zolfaghari, and LR algorithm MINLP D Min(C1+C3+C4+C9)
Davoudpour (2014)
Mari, Lee, and Memon LINGO MILP AF Min(C1+C4+C5+C6+C8),
(2014) Min E, Min (Disruption
cost)
Jeong et al. (2014) CPLEX MILP AF Min C4, Min (Disruption
cost)
Marufuzzaman et al. (2014) Benders’ MILP AF Min (C1+C4+C7+C12)
decomposition
Azad et al. (2014) Hybrid TS & SA MINLP CA,AT Min(C1+C4+ Disruption
cost)
Rodriguez, Vecchietti, Piece-wise linear MINLP D Min(C1+C2+C3+C4+C5
Harjunkoski, and approximation +C6+C7+C14)
Grossmann (2014)
Yongheng, Rodriguez, LR algorithm MINLP D Min(C1+C2+C3+C4+C5
Harjunkoski, and +C6+C7+C14)
Grossmann (2014)
Li and Savachkin (2016) Piece-wise linear MINLP AF Min(C1+C4)
approximation & LR
algorithm
Pasandideh et al. (2015) NSGA II & NRGA MINLP D, C, PT Min(C1 +C2+C3+C4+C14),
Min M
Hatefi et al. (2015a) CPLEX MILP CA Min (C1+C4+C5+C6+C16
+Disruption cost)
Hatefi et al. (2015b) CPLEX MILP CA Min (C1+C4+C5+C6+C16
+Disruption cost)
Table’s summary: Exact algorithms: 22%, Heuristic MILP: 20% Single objective (Minimization: 66%, Maximization: 8 %)
algorithms: 42%, Meta-heuristics: 14%, MINLP: 80% Multiple objectives: 26%
Commercial solvers: 22%
[1] In this study, MINLP model is approximated by an MILP model. [2] In designing the algorithm, insights from bidirection search algorithm and outer approximation
algorithm were drawn.
[3] This study presented different models for integrated SC netwrok design under uncertainty. Furthermore, the author extended the model for the situation in which mean
and variance of demand are dependent to scenarios. [4] In this study the MINLP model is linearized. [5] The MINLP model is linearized by using regression.
hence, the variation of stochastic parameters over a planning hori- teus, and Almeida (2013). In general, a stochastic problem with
zon is captured. Additionally, first stage decisions are determined T stages includes a sequence of random parameters ζ1 ,ζ2 ,...,ζT −1
for a planning horizon with multiple periods in some papers (e.g., defined on a probability space (refer to Billingsley (2012) for a
Aghezzaf, 2005; Poojari, Lucas, & Mitra, 2008). rigorous definition of a probability space). In a SCND problem,
In most two-stage stochastic SCND problems, the second stage ζi , i = 1,2,...,T − 1 is the vector of stochastic parameters, such as
decisions are continuous and positive variables; therefore, the costs, demand, supply, capacity and so on, at stage i of a multi-
value of recourse function for each feasible solution of first stage stage stochastic program.
decisions can be obtained through solving a linear program for A scenario is defined as a realization of random parameters
each scenario. Thus, as shown by Table 8, decomposition tech- ζ1 ,ζ2 ,...,ζT −1 and a scenario tree is exploited for discrete represen-
niques such as Benders’ decomposition have been widely applied tation of stochastic parameters. Indeed, a scenario tree is an ex-
for solving them. plicit display of branching process for progressive observation of
ζ1 ,ζ2 ,...,ζT −1 under the assumption that these stochastic parame-
ters have a discrete support. Fig. 10 illustrates a scenario tree in-
5.4.2. Multi-stage stochastic programs cluding nine scenarios for a four-stage stochastic program that can
SCND problems with stochastic parameters and a multi-period be employed for a stochastic SCND problem over a planning hori-
setting can result in a multi-stage stochastic program. There are a zon with three periods.
limited number of studies in this area such as Albareda-Sambola, In a multi-stage stochastic program, the realization of random
Alonso-Ayuso, Escudero, Fernández, and Pizarro (2013), Goh et al. parameters ζ1 ,ζ2 ,...,ζt−1 at an intermediate stage t has been ob-
(2007), Nickel et al. (2012), Fattahi et al. (2017), and Pimentel, Ma-
Table 8
Solution approach and specifications of the mathematical model for scenario-based stochastic problems (TSSP and MSSP are abbreviations for two-stage stochastic program
and multi-stage stochastic program, respectively).
Articles Solution approach Mathematical Objective

model
Exact algorithm Heuristic Meta-heuristic Commercial
solver[1]
Tsiakis et al. (2001) CPLEX MILP-TSSP Min (C1+ C4+C5+ C6)

Alonso-Ayuso, Escudero, Garìn, Branch and fix MILP-TSSP Max (I-C1-C3-C4-C5-C7-C8)
Ortuño, and Pérez (2003) coordination
algorithm
Guillén et al. (2003) CPLEX MILP-TSSP Max(I-C1-C3-C4-C5-C6-C15),
Max R, Min M
Guillén et al. (2005) CPLEX MILP-TSSP Max(I-C1-C3-C4-C5-C6-C15),
Max R, Min M
Santoso et al. (2005) Benders’ MILP-TSSP Min(C1+C4+C6 +C11)
decomposition
Listeş and Dekker (2005) CPLEX MILP-3SSP[2] Max(I-C4-C16)
Guillen, Mele, Espuna, and GA MILP-MSSP Max(I-C1-C2-C3-C8-C14)
Puigjaner (2006)
Vila et al. (2007) CPLEX MILP-TSSP Max(I-C1-C3-C4-C5-C6 -C15)
Snyder, Daskin, and Teo (2007) LR-based exact MINLP-TSSP Min(C1+C3+C4+C9)
algorithm
Goh et al. (2007) Newton’s method MILP-MSSP Max(I-C1-C4-C15)
combined with
Moreau–Yosida
regularization
Listeş (2007) L-shaped algorithm MILP-TSSP Max(I-C1-C4-C5-C12 -C16-C18)
Lee et al. (2007) CPLEX MILP-TSSP Min(C1+C3+C4+C5+C6+C16-I)
Salema, Barbosa-Povoa, and CPLEX MILP-TSSP Min(C1+C4+C5+C14+C16
Novais (2007) +C18)
Chouinard et al. (2008) CPLEX MILP-TSSP Min(C1+C4+C16)
Poojari et al. (2008) Benders’ MILP-TSSP Min(C1+C4+C11+C14)
decomposition
Azaron et al. (2008)[3] LINGO MINLP-TSSP Min(C1+C6+C15), Min M1 , Min
M2
Lee and Dong (2009) SA MILP-TSSP Min(C1+C2+C4)
Schütz et al. (2009) LR algorithm MILP-TSSP Min(C1+C4+C6+C5+C14)
Pishvaee et al. (2009) LINGO MILP-TSSP Min(C1+C4+C5+C6+C16+C20)
√
Franca et al. (2010) MILP-TSSP Max (I-C1-C2-C4-C5-C6-C8),
Min (amount of defective raw
materials), Min M
Lee et al. (2010) CPLEX MILP-TSSP Min(C1+C4+C6+C16)
Sabio et al. (2010) CPLEX MILP-TSSP Min(C1+C3+C4+C5+C7+
C11+Capital and operating
costs of transportation
modes), Min M
Shu, Ma, and Li (2010) Column generation MINLP-TSSP Min(C1+C3+C4+C9)
Mo, Harrison, and Barton CPLEX MILP-TSSP Min(C1+C4+C8)
(2010)
Kara and Onut (2010a) CPLEX MILP-TSSP Max (I-C1-C2-C4-C16-C18)
Bidhandi and Yusuff (2011) Benders’ MILP-TSSP Min(C1+C4+C5+C6+C8
decomposition +C12+C14)
Longinidis and Georgiadis CPLEX MILP-TSSP Max (Financial performance
(2011) based on
(I-C1-C3-C4-C5-C6-C15))
Georgiadis et al. (2011) CPLEX MILP-TSSP Min(C1+C3+C4+C5+C6)
Shukla, Agarwal Lalit, and CPLEX MILP-TSSP Min(C1+C4+C6),
Venkatasubramanian (2011) Min(Disruption cost)
Cardona-Valdés et al. (2011) L-shaped algorithm MILP-TSSP Min(C1+C4+C6), Min(Service
time)
Shimizu, Fushimi, and Wada TS MINLP-TSSP Min(C1+C4+C5+C6+C8), Min
(2011) M
Kim, Realff, and Lee (2011) CPLEX MILP-TSSP Max(I-C1-C4-C5-C7-C8-C11)
Rajgopal, Wang, Schaefer, and L-shaped algorithm MILP-TSSP Min(C1+C4+C6+C8 -SA)
Prokopyev (2011)
Giarola, Shah, and Bezzo (2012) CPLEX MILP-TSSP Max(I-C1-C4-C5-C7-C8-C11)
Kiya and Davoudpour (2012) Benders’ MILP-TSSP Min(C1+C4 +C5+C6+C7-C1’ )
decomposition
Noyan (2012) Benders’ MILP-TSSP Min(C1+C4+C7+C8 +C14+SA),
decomposition Min M
Jabbarzadeh et al. (2012) GA & LR algorithm MINLP-TSSP Max (I-C1-C3-C4-C9)
Mak and Shen (2012) LR algorithm MILP-TSSP Min(C1+C3+C4+C8+C12+C14)
Chen and Fan (2012) Progressive hedging MILP-TSSP Min(C1+C4+C5+C7+C14)
algorithm
Klibi and Martel (2012a) CPLEX MILP-TSSP Max(I-C1-C4-C6-C8)
Table 8 (continued)

model
solver[1]
Almansoori and Shah (2012) CPLEX MILP-MSSP Min(C1+C2+C3+C4+C5+C7

+C8+C11+ Capital and
operating costs of
transportation modes)
Gebreslassie et al. (2012) L-shaped algorithm MILP-TSSP Min(C1+C4+C5+C7
+C8+C11+C14-Governmental
incentives), Min M
Nickel et al. (2012) CPLEX MILP-MSSP Max(I-C1-C4+Remained
budget), Max R, Min M
Amin and Zhang (2013) CPLEX MILP-TSSP Min(C1+C4+C5+C16-Cost
saving from products’
recovery), Max (Environmental
performance)
Albareda-Sambola et al. (2013) Fix and relax MILP-MSSP Min(C1+Maintenance costs of
coordination facilities+ Assignment costs)
algorithm
Kazemzadeh and Hu (2013) CPLEX MILP-TSSP Max(I-C1-C4-C5-C6-C7) or Min
M
Pimentel et al. (2013) LR algorithm MILP-MSSP Min (C1+C2+C4+C5+C7+C12
+C13+C14)
Qin et al. (2013) Disjunctive MILP-TSSP Min(C1+C3+C4)
decomposition-
based Branch and
Cut
√
Ramezani et al. (2013a) MILP-TSSP Max(I-C1-C5-C6-C7-C8-C16),
Max R, Min (amount of
defective raw materials), Min
M
Longinidis and Georgiadis DICOPT MINLP-TSSP Max (Financial performance),
(2013) Max (Credit solvency)
Cardoso, Barbosa-Póvoa, and CPLEX MILP-3SSP Max (I-C1-C3-C4-C6-C7-C8-
Relvas (2013) C12-C16)
Baghalian et al. (2013) LINGO MINLP-TSSP Max(I-C1-C3-C4-C5-C6-
C14+SA), Min M
Ahmadi-Javid and Seddighi SA MILP-TSSP Min(C1+C17+(production and
(2013) distribution disruption costs))
or Min M
Singh, Jain, and Mishra (2013) LINGO MILP-TSSP Min(C1+C3+C6+C14)
Tong, Gong, Yue, and You CPLEX MILP-TSSP Min(C1+C2
(2013) +C4+C5+C7+C8+C11+C14-
Governmental incentives)
Klibi and Martel (2013) CPLEX MILP-TSSP Max(I-C1-C2-C4-C6-C8)
Meisel and Bierwirth (2014) [4]
Variable - Min(C1+C2+C4+C5)
Neighborhood
Search (VNS)
Madadi et al. (2014) GUROBI MILP-TSSP Min(C1+C2+C4
+C14+discarding cost of
tainted products) or Min M
Li and Hu (2014) GAMS MILP-TSSP Max(I-C1-C4-C6-C7-C14)
Cardona-Valdés, Álvarez, and Hybrid GRASP & TS MILP-TSSP Min(C1+C4), Min(maximum
Pacheco (2014) travel time through the
network)
Liu and Guo (2014) LR algorithm MILP-TSSP Max(Min(fill rate of affected
areas)-mismatch among
correlated relief supplies), Min
(C1+C4+C8+cost of using
transportation modes)
Soleimani et al. (2014) CPLEX MILP-TSSP Max(I-C1-C3-C4-C5-C8-C14-
C16-C20), Min
M
Huang and Goetschalckx (2014) Branch & reduce MINLP-TSSP Max(I-C1-C4), Min M
algorithm
Zeballos, Méndez, CPLEX MILP-TSSP Min(C1+C3+C4)
Barbosa-Povoa, and Novais
(2014)
Dayhim et al. (2014) CPLEX MILP-TSSP Min(C1+ C3+C4+C5+Carbon
emission +Energy
consumption +Risk costs
+Capital cost of transportation
modes)
Table 8 (continued)

model
solver[1]
Subulan, Baykasoğlu, Özsoydan, CPLEX MILP Min(C1+C4+C5+C8+C16-I),

Taşan, and Selim (2014) Max (Coverage of return
products)
Kaya, Bagci, and Turkay (2014) CPLEX MILP-TSSP Min(C1+C3+C8+C9+C16-I)
Soleimani and Govindan (2014) CPLEX MILP-TSSP Min(C1+C3+C4+C8+C14+C16),
Min M
Kılıç and Tuzkaya (2015) Linear relaxation-based MILP-TSSP Max(I-C1-C3-C4-C6-C8-C14)
heuristic
Khatami et al. (2015) Benders’ MILP-TSSP Min(C1+C2+C3+C4+C5+C6
decomposition +C7+C14+C16)
Govindan et al. (2015) AMOEMA, MILP-TSSP Min(C1+C4+C5+C6+C10+C11),
AMOVNS, NSGA II Min E
Ayvaz et al. (2015) CPLEX MILP-TSSP Max(I-C1-C4-C16)
Keyvanshokooh et al. (2016) Benders’ MILP-TSSP Max(I-C1-C3-C4-C5-C7-C14-
decomposition C16)
Hasani and Khosrojerdi (2016) Memetic algorithm MINLP-TSSP Max(I-C2-C3-C4-C5-C8-C10-
C15)
Govindan and Fattahi (2017) CPLEX MILP-TSSP Min(C1+C3+C4+C5+C6
+C7+C14), Min M
Table’s summary: Exact algorithms: 18%, Heuristic algorithms: MILP: 88%, TSSP: 88% Single objective (Minimization: 42%,
13%, Meta-heuristics: 12%, MINLP: 12% MSSP:8% Maximization: 28 %), Multiple objectives: 30%
Commercial solvers: 57% 3SSP: 2%
[1]In some papers, the type of commercial solver that has been used is not mentioned and therefore, we have only indicated commercial solver as a solution approach by
√
“ ” in these papers.
[2] 3-stage stochastic programming model. [3] This paper considered two risk measures. [4] This paper did not propose a stochastic model for the problem.
served and the residual uncertainty includes the random param- the multi-stage stochastic program is often utilized. It should be
eters ζt ,ζt+1 ,...,ζT −1 . However, the distribution of these residual highlighted that all papers that used a multi-stage stochastic pro-
stochastic parameters is conditioned upon the realization of ran- gram have a planning horizon with multiple periods and the un-
dom parameters in previous stages (Defourny, Ernst, & Wehenkel, certainty related to stochastic parameters has been realized pro-
2011). If we consider a sequence of decision variables from stages gressively in each period. At each period, some decisions have
1 to T as x1 , x2 , ..., xT −1 , xT , then Fig. 11 represents the sequence of to be made before uncertainty realization and some others are
decisions and realizations of random parameters for each stage of made afterwards. Notice that not all stochastic SCND problems
a T-stage stochastic program. with multi-period setting result in multi-stage stochastic programs
As pointed out by Dupačová (1995), in T-stage stochastic pro- necessarily (e.g., Georgiadis et al., 2011; Schütz et al., 2009).
grams, it is also possible to consider random parameters related to Furthermore, as shown in Table 8, most stochastic problems
stage T represented by ζT . These parameters usually affect only the have been developed an MILP model, and Benders’ decomposition
objective function value. algorithm, called also L-shaped algorithm in stochastic programs,
A policy in a multi-stage stochastic program has to be non- is relatively popular to solve the two-stage stochastic programs.
anticipative, meaning that the decisions cannot depend on outcome To solve multi-stage stochastic programs in this area, Albareda-
of random parameters in the future. As explained by Dupačová Sambola et al. (2013) and Pimentel et al. (2013) proposed a fix-
(1995), there are two popular approaches to develop a multi- and-relax coordination and the LR algorithm as a heuristic solution
stage stochastic programming formulation. The first one is based approach, respectively.
on formulating a multi-stage stochastic program as a sequence of
nested two-stage stochastic programs and also inserting the non- 5.4.3. Scenario generation for stochastic SCND problems
anticipativity settings implicitly. In fact, the total objective func- Compared with continuous stochastic parameters, scenario ap-
tion is calculated through a recursive evaluation in this approach. proach for modeling stochastic parameters often results in more
However, the second approach imposes the non-anticipativity con- tractable models. It is also possible to regard dependency among
straints explicitly. stochastic parameters by using the scenario approach. For multi-
Generally, multi-stage stochastic programs have been utilized stage and two-stage stochastic programs where the parameters are
rarely in the related literature. Thus, there is a high potential to stochastic over multiple periods, a scenario tree and a scenario fan
develop stochastic SCND models with multiple periods using this are often used, respectively. In this case, not only the parameters
approach. For more information about multi-stage stochastic pro- can be correlated with each other, but also they can be correlated
gramming, see Kali and Wallace (1994) and Birge and Louveaux across the time units and, therefore, it would be more difficult to
(2011). In Table 8, the reference papers that used a scenario- generate an appropriate set of scenarios.
based stochastic programming approach are categorized according A main part of research works in stochastic programming con-
to their solution approaches, mathematical models, and objective text has been assigned to the task of generating efficient scenar-
functions. ios for stochastic programs. For this aim, the substantial concern is
As illustrated in Table 8, most studies have employed two-stage that a scenario generation method has to be evaluated in terms of
stochastic programs. In essence, they assumed that their SCND quality and suitability. In this regard, in-sample and out-of-sample
problem has two-stage nature, which means there is a single mo- stabilities are two important requirements for an efficient scenario
ment for uncertain parameters to become known (Laporte et al., generation procedure. To learn more about quality and stability
2015). Nonetheless, the uncertainty has been realized progressively measures for scenario generation methods, one can refer to Kaut
in more than one moment in many real-world problems and thus, and Wallace (2007).
appropriate specifically when the stochastic parameters vary no-

ticeably. In a stochastic program where we have the random pa-
rameters with known probability distributions, the amount of a
SC’s profit/cost (or more generally SC’s outcome) is often a ran-
dom variable. Its probability distribution depends on the values of
decision variables. In a numerical optimization procedure, it is of-
ten required to quantify the risk in order to make decisions in such
a way that they can limit the level of SC’s risk. To this aim, some
dispersion statistics are defined as risk measures in the related lit-
erature.
A risk measure ρ maps a random outcome Y to a real value
ρ (Y ). Here, the allowable random outcomes are shown by Y. Gen-
erally, ρ is a risk mapping function that assigns a certain family of
random outcomes to a set of real numbers (Fábián, 2013). Further,
a precise definition for the concepts of risk measures and their
properties are explicated in terms of a mathematical framework
by Ruszczynski and Shapiro (2006).
In a SCND problem, the random objective relies on the values of
decision variables. Formally, it can be stated as Y = F (x ), F : X → Y
where x ∈ Rn is decision variables vector and X ⊆ Rn is a non-
empty set of feasible decisions, and in this case, ρ (F (x )) is a risk
function. Then, the level of risk aversion can be incorporated into
a stochastic program using two main approaches (Fábián, 2013). In
a stochastic optimization problem with cost/loss minimization ob-
jective, a risk constraint, ρ (F (x )) ≤ θ , where θ is a constant num-
Fig. 10. A scenario tree example (Nodes are indexed by l. The root node is repre-
sented by index l = 1 and the leaf nodes are represented by indexes l = 11 to l = 19).
ber, is inserted into the problem as the first approach. The second
one is a weighted mean-risk criterion defined for the problem such
that the objective function is written as Min E (F (x )) + λρ (F (x ))
x∈X
A few studies (e.g., Fattahi & Govindan, 2016; Govindan & Fat- where λ is a risk aversion factor.
tahi, 2017; Keyvanshokooh et al., 2016; Klibi & Martel, 2012b; In SCND literature, many risk measures firstly developed in the
Schütz et al., 2009) developed an appropriate scenario generation area of finance and insurance have been applied. The most widely
procedure to obtain a set of scenarios, and typically most reference applicable ones are variance, standard deviation, absolute devia-
papers exploited a pre-determined small set of scenarios with def- tion, conditional value at risk (CVaR), and central semideviation.
inite probabilities for their stochastic programs. For a single period Another worthwhile approach for incorporating risk into a SCND
CLSC network design with stochastic demand and return quanti- problem is by assuming a constant target for SC’s outcome and
ties, Khatami, Mahootchi, and Farahani (2015) used Cholesky’s fac- then, the risk measure is defined as a semideviation of SC’s out-
torization method in their scenario generation approach to deal comes from the predetermined target. In Appendix B, Table B.1,
with dependency of stochastic parameters. In addition, clustering the aforementioned risk measures are defined mathematically for
methods have been applied by Khatami et al. (2015) and Pishvaee, a cost/loss minimization problem. In addition, Fig. 12 demonstrates
Jolai, and Razmi (2009) to reduce the number of generated scenar- the frequency of applying these risk measures in the reference pa-
ios although these studies have not investigated the quality of con- pers. For more information about computational complexity of dif-
structed scenarios. Li and Hu (2014) and Poojari et al. (2008) ap- ferent risk measures, one can refer to Ahmed (2006) and Fábián
plied the moment matching method to construct a set of scenarios (2013).
and obtain their corresponding probabilities. Govindan and Fattahi Furthermore, Guillén, Mele, Bagajewicz, Espuna, and Puigjaner
(2017) and Keyvanshokooh et al. (2016) applied the Latin Hyper- (2005) and Franca, Jones, Richards, and Carlson (2010) computed
cube Sampling method instead of Monte Carlo to generate a fan the probability of SC’s profit being less than a pre-determined tar-
of scenarios and then reduced the number of generated scenarios get level as a risk measure. Recently, a review paper is represented
by using backward scenario selection technique. Moreover, there by Heckmann et al. (2015) in which a variety of risk measures
are different types of scenario reduction techniques in the Stochas- and risk modeling techniques in SCM have been reviewed. It is
tic Programming community that can be applied in this research worth noting that all risk measures introduced in this section are
area (e.g., Dupačová, Gröwe-Kuska, & Römisch, 2003; Heitsch & exploited based on economical objective functions, such as SC’s
Römisch, 2003). cost/profit, in SCND studies.
In the related area, sample average approximation (SAA)
method has been used broadly to reduce the size of stochastic
programs through repeatedly solving the problem with a smaller 5.6. Robust optimization in the context of SCND
set of scenarios. These studies include: Bidhandi and Yusuff (2011),
Chouinard, D’Amours, and Aït-Kadi (2008), Kiya and Davoudpour According to a robust optimization (RO) framework presented
(2012), Klibi and Martel (2012a), Klibi and Martel (2012b), Lee and by Mulvey, Vanderbei, and Zenios (1995), there exist two kinds
Dong (2009), Lee, Dong, and Bian (2010), Lee, Dong, Bian, and of robustness including solution robustness and model robustness
Tseng (2007), Santoso, Ahmed, Goetschalckx, and Shapiro (2005), meaning that the solution of a RO problem is "nearly" optimal and
Schütz et al. (2009), and Ayvaz, Bolat, and Aydın (2015). "nearly" feasible in all possible realizations of uncertain parame-
ters, respectively. The definition of "nearly" is dependent upon the
5.5. Risk measures in the context of SCND modeler’s viewpoint. In an uncertain environment where a deci-
sion maker does not know probability distributions of uncertain
Traditionally, the stochastic SCND problem is on the basis of parameters, it is not possible to use expected value criterion or
the expected value criterion. However, this criterion might be in- other ones applied for the studies in Sections 5.4 and 5.5. In such
Fig. 11. Order of observations and decisions in a T-stage stochastic program.
Fig. 12. The frequency of applying different risk measures in the reference papers.
an uncertain environment, RO is applicable through defining dif- et al. (2016) utilized this approach. This method could lead to in-
ferent robustness measures for the optimization problem. In RO feasibility for some values of p.
problems, uncertain parameters may be continuous or specified Several studies have applied the risk measures for SCND prob-
via some discrete scenarios. For continuous ones, it is often as- lem and called them as robustness measures. In this regard, vari-
sumed that these uncertain parameters could be varied within a ance is used by Jin, Ma, Yao, and Ren (2014) and absolute devia-
pre-defined interval called interval-uncertainty. tion is applied by Jabbarzadeh et al. (2014), Kara and Onut (2010b),
Pan and Nagi (2010), and Sadghiani et al. (2015). It is worth not-
ing that only Aghezzaf (2005), Jin et al. (2014), and Sadghiani et al.
5.6.1. Robust models with discrete scenarios (2015) examined model robustness measures for a SCND problem.
Different robustness measures with or without probability dis- In Table 9, all studies in the area of scenario-based robust SCND
tributions are defined for the studies in this category. Two com- are categorized with respect to their solution approaches, objective
mon measures for scenario-based RO programs are minimax cost functions, and mathematical models.
and minimax regret. The minimax cost measure obtains a solution As demonstrated in Table 9, most studies applied commercial
minimizing maximum cost over all scenarios. However, in the min- solvers to solve the proposed mathematical models and consider-
imax regret, (absolute or relative) regret is determined as the (ab- ing robustness measures usually led to multi-objective optimiza-
solute or percentage) difference between the cost of a solution and tion problems in several studies.
the cost of the optimal solution for a scenario. Snyder (2006) re-
viewed various minimax models in the area of FL problem. 5.6.2. Robust models with interval-uncertainty
The minimax absolute regret measure is utilized by Realff, Am- Generally, RO with interval-uncertain parameters has been ap-
mons, and Newton (2004) and Ramezani, Bashiri, and Tavakkoli- plied in order to protect optimization problems against infeasibil-
Moghaddam (2013b) to design a RL and CLSC network, respec- ity due to perturbations of uncertain parameters and also to retain
tively. It should be mentioned that a study minimizing the ex- computational tractability. The primary step in RO with interval-
pected relative regrets for all scenarios in a situation where the uncertain parameters was done by Soyster (1973). The general idea
probabilities of scenarios are available is presented by De Rosa, was to convert the uncertain optimization problem into a deter-
Gebhard, Hartmann, and Wollenweber (2013). Further, Ahmadi- ministic counterpart program so that each feasible solution should
Javid and Seddighi (2013) and Govindan and Fattahi (2017) exam- be feasible for all realizations of uncertain parameters within their
ined a SCND problem with minimax cost measure. pre-defined uncertainty sets. However, Soyster’s approach mostly
Another approach for obtaining solution robustness is pre- achieves over-conservative solutions. In essence, by using this ap-
sented by Kouvelis, Kurawarwala, and Gutierrez (1992). By adding proach, we actually give up optimality for the nominal problem
some constraints, they made sure that the relative regret is not (where uncertain parameters are fixed to their nominal quantities)
greater than p, where p > 0 is a pre-determined parameter, for to ensure robustness. This means to guarantee the robustness, we
each scenario. Snyder and Daskin (2006) called this method as p- need to lose optimality.
robustness in the area of FL. In the related literature, some stud- Then, E.l. Ghaoui, Oustry, and Lebret (1998), El Ghaoui and Le-
ies including Hatefi and Jolai (2014), Li, Liu, Zhang, and Hu (2015), bret (1997), and Ben-Tal and Nemirovski (1998, 1999) addressed
Peng, Snyder, Lim, and Liu (2011), Tian and Yue (2014), and Torabi the over-conservatism of this robust solution. Their approaches led
Table 9
Solution approach and specifications of the mathematical model for scenario-based robust problems.

model
solver
Realff et al. (2004) AIMMS MILP-TSSP Min(Max(Regret(I-C1-C2-C3-C4-

C16)))
Aghezzaf (2005) [1] LR algorithm MILP-TSSP Min M1 +M2
Pan and Nagi (2010) A heuristic based on MILP-TSSP Min(C1+C3+C4 +C6+C12
k-shortest path +C14), Min M
algorithm
Kara and Onut (2010b) CPLEX MILP-TSSP Max(I-C1-C4-C16-C18), Min M
Peng et al. (2011) GA MILP-TSSP Min(C1+C4)
De Rosa et al. (2013) CPLEX MILP-TSSP Min M
Ramezani et al. (2013b) CPLEX MILP-TSSP Min(Max(Regret(I-C1-C4-C5-C6-
C7-C16)))
Ahmadi-Javid and Seddighi SA MILP-TSSP Min(Max(C1 +C17+(production
(2013) and distribution disruption
costs)))
Tian and Yue (2014) Benders’ MILP-TSSP Min(C1+C4+C5+C6+C7
decomposition +C8+C10+C14)
Jabbarzadeh et al. (2014) LINGO MILP-TSSP Min(C1+C3+C4+C6), Min M
Jin et al. (2014) TS MINLP-TSSP Min(C1+C4+C5+C6+C8), Min
M
Hatefi and Jolai (2014) CPLEX MILP Min(C1+C4+C5+C6+C14+C16)
Li et al. (2015) artificial fish swarm MILP-TSSP Min(C1+C4+C6+C12+C14)
algorithm
Torabi et al. (2016) CPLEX MILP Min(C1+C4+C5+C6+C14+C16)
Sadghiani et al. (2015) [2]
CPLEX MILP Min(C1+Capital costs of
transportation modes), Min
M1 , Min M2
Govindan and Fattahi (2017) CPLEX MILP-TSSP Min(Max(C1+C3+C4+C5
+C6+C7+C14))
Table’s summary: Exact algorithms: 6%, Heuristic algorithms: MILP: 92%, Single objective (Minimization: 60%, Maximization: 0 %),
12%, Meta-heuristics: 18%, MINLP: 6% Multiple objectives: 40%
[1], [2], These papers considered two robustness measures including solution’s and model’s robustness measures.
to less conservative solutions through allowing the uncertainty sets As illustrated in Table 10, there are a few studies about ro-
to be ellipsoids. Nonetheless, their robust formulations resulted in bust SCND with interval-uncertainty. Most of these reference pa-
nonlinear but convex models, and thereby being difficult to solve pers used commercial solvers to solve the equivalent models for
as compared to Soyster’s method. Bertsimas and Sim (20 03, 20 04) their robust counterparts. It is worth noting that in Keyvanshokooh
presented a different robust approach in which the conservatism et al. (2016) and Hatefi and Jolai (2014), some uncertain param-
level of robust solutions could be controlled and resulted in a lin- eters have interval-uncertainty and some others are modeled by
ear optimization model. This approach is also applied for discrete using discrete scenarios. This approach is applicable whenever we
optimization models. have different types of uncertainty in the SCND problem.
However, Ben-Tal, Goryashko, Guslitzer, and Nemirovski
(2004) pointed out that in all above conventional RO approaches, 5.7. Fuzzy mathematical programming in the context of SCND
all decisions have to be made before uncertainty realization. Nev-
ertheless, most real-world problems, in particular SCND problem, Fuzzy mathematical programs have been commonly used
have multi-stage nature, and hence some decisions have to be to design SC networks under uncertainty. In general, the
determined after realization of all or part of existing uncertainties. fuzzy mathematical programming can be divided into flexi-
To this aim, they presented a multi-stage RO approach, called ble and possiblistic programming. Consider the classical linear
Affinely Adjustable Robust Counterpart (AARC). This idea allows program Min cT x, s.t. Ax ≥ b, x ≥ 0. In accordance with Tanaka,
for making adjustable decisions that are affinely contingent on the Okuda, and Asai (1973) and Zimmermann (1991), a flexible pro-
primitive uncertainties. cT x, s.t. Ax≥b,
gramming problem can be written as Min ˜ x≥0
In practice, even though the exact distributions of uncertain
where fuzzy goals and sets are utilized to characterize the vague-
parameters are often not known in advance, moment informa-
ness related to decision maker’s aspirations and constraints, re-
tion or uncertainty about the distribution itself is usually known.
spectively. In other words, this approach is applicable to deal with
To deal with this situation, Distributionally Robust Optimization
flexible target value of goals and elasticity of soft constraints.
(DRO) was firstly proposed by Scarf, Arrow, and Karlin (1958) and
On the other hand, a possiblistic programming problem can
then extended by Delage and Ye (2010), Goh and Sim (2010), and c˜T x, s.t. A˜ x ≥ b˜ , x ≥ 0 where the imprecise or
be expressed as Min
Wiesemann, Kuhn, and Sim (2014). In DRO, an uncertain parameter
ambiguous data is modeled through possibility distributions (see
follows a distribution which is itself subject to uncertainty.
Tanaka & Asai, 1984). The application of this approach is to manage
In the area of SCND problem, a few studies proposed ro-
deficiency of information for the exact values of a model’s param-
bust counterpart formulations where interval-uncertain parame-
eters. Moreover, in fuzzy mathematical programming, it is possible
ters are taken into account. In Table 10, these studies are listed
to take care of ambiguous coefficients and also vague preferences
in which robust problems are solved after proposing their equiv-
of decision makers.
alent tractable formulations. The specifications of these equivalent
All studies in this area have two major phases to solve a prob-
formulations are also highlighted in Table 10.
lem modeled using a fuzzy mathematical programming. Firstly,
Table 10
Solution approach and specifications of the equivalent formulations for robust counterpart of RO problems.
Articles Solution approach Equivalent model for robust counterpart of

problems
Exact algorithm Heuristic Meta-heuristic Commercial Mathematical Objective

solver model
Pishvaee, Rabbani, and Torabi CPLEX MILP Min(C1+C4+C14)

(2011)
Hasani, Zegordi, and Nikbakhsh LINGO MINLP Max(I-C1-C3-C4-C5-C8-C10-
(2012) C14-C16)
Vahdani et al. (2012) GAMS MILP Min(C1+C4+C5+C6+C16),
Zokaee, Jabbarzadeh, Fahimnia, LINGO MILP Min(C1+C4+C14)
and Sadjadi (2014)
Hatefi and Jolai (2014) CPLEX MILP Min(C1+C4+C5+C6+C14+C16)
Tong, You, and Rong (2014) Parametric approach DICOPT, MINLP Min((C1+C4 +C5+C6+C7+C11-
based on Newton’s BARON, SBB Governmental incentives)/
method, Sales’ amount)
Reformulation-
linearization
method
Hasani et al. (2015) Combined memetic MINLP Max(I-C2-C3-C4-C5-C8-C10-
algorithm and C15-C16)
adaptive VNS
Akbari and Karimi (2015) CPLEX MILP Min(C1+C3+C4 +C5+C6+C7)
Dubey, Gunasekaran, and CPLEX MILP Min(C1 +C4+C5+C6+C7+C16),
Childe (2015) Min(Delivery time + Collection
time)
Keyvanshokooh et al. (2016) Benders’ MILP Max(I-C1-C3-C4-C5-C7-C14-
decomposition C16)
Hasani and Khosrojerdi (2016) Memetic algorithm MINLP Max(I-C2-C3-C4-C5-C8-C10-
C15)
Table’s summary: Exact algorithms: 9%, Heuristic algorithms: MILP: 72%, Single objective (Minimization: 46%, Maximization: 36%),
9%, Meta-heuristics: 18%, MINLP: 28% Multiple objectives: 18%
a fuzzy model is converted into a crisp and usual mathematical tablished demand points after disasters and is called humanitarian
model in which the existing uncertainties are handled according to SC.
assorted interpretation of the problem. Then in the second phase, While SC disruptions can have substantial influence on key SC
this transformed mathematical model is solved by using an opti- parameters such as demand, supply, delivery time of products, and
mization approach or tool (Inuiguchi & Ramık, 20 0 0). costs, they may also result in reducing capacity of SC facilities and
SCND problems under a fuzzy environment are categorized in transportation links or even eliminating them. In addition, in hu-
Table 11 based on their fuzzy uncertainties, transformed mathe- manitarian SCs, the demand for relief supplies has a great deal of
matical models, and solution approaches. It should be noted that uncertainty, depending on the type, magnitude, and location of a
in Table 11, we report the optimization tools or techniques for disaster.
solving the crisp transformed mathematical models as solution ap- In this area, most studies assume a failure probability for
proaches. Here, the techniques used for handling multi-objective a facility or transportation link in the face of disruption as a
problems or transforming fuzzy models are not considered. In pre-specified parameter. They are also called reliable SCND mod-
Table 11, in the column for mathematical model, the dashes mean els. These studies include Azad et al. (2014), Azad, Saharidis,
that no crisp transformed model is presented in related studies. Davoudpour, Malekly, and Yektamaram (2013), Cui et al. (2010),
As shown by Table 11, most studies in this area considered am- Hatefi, Jolai, Torabi, and Tavakkoli-Moghaddam (2015a), Li and
biguous input data to present a possiblistic programming model Savachkin (2016), Li, Zeng, and Savachkin (2013), Marufuzza-
and used commercial solvers to solve the transformed equivalent man, Eksioglu, Li, and Wang (2014), Vahdani et al. (2012), Vah-
crisp models. Moreover, many studies dealt with multi-objective dani, Tavakkoli-Moghaddam, Jolai, and Baboli (2013), Vahdani,
problems in this area. Tavakkoli-Moghaddam, and Jolai (2013), and Hatefi, Jolai, Torabi,
and Tavakkoli-Moghaddam (2015b). In Cui et al. (2010), customers
are assigned to more than one facility and hence in the face of dis-
ruption, each customer can be served by the nearest operational
5.8. Optimization approaches for SCND with disruptions (non-disrupted) facility. Azad et al. (2014) presumed that if a fail-
ure occurs for a facility of SC, then the percentage of its disrupted
As SCND with disruptions has received much attention recently, capacity is a stochastic parameter. They also presented an opti-
we discuss different optimization approaches to cope with this mization model by using the CVaR measure.
problem in this section. Lately, Snyder et al. (2016) provided a Sometimes, the uncertainty related to disruptions is modeled
review paper regarding the management science and operation as a finite set of discrete scenarios. In this regard, Hatefi and Jo-
research models for handling SC disruptions. Further, Laporte et al. lai (2014), Peng et al. (2011), and Li et al. (2015) utilized the
(2015) examined the existing FL models under disaster events. p-robustness approach. Also, Ahmadi-Javid and Seddighi (2013),
SCND studies with disruptions can be divided into business and Noyan (2012), Sadghiani et al. (2015), and Baghalian, Rezapour,
non-business SCs. The goal of a business one is to design a SC such and Farahani (2013) developed some risk-averse scenario-based
that it can perform well even after disruption occurrence. The non- stochastic models by using well-known risk measures in the
business SCs such as Liu and Guo (2014), Noyan (2012), and Jeong stochastic programming context. It is worth noting that most SCND
et al. (2014) are often designed to deliver relief items to the es-
Table 11
Optimization aspects related to the studies under fuzzy environment.
Articles Fuzzy mathematical programming Crisp transformed mathematical model
Ambiguous Vagueness of Vagueness of Mathematical Solution Objective

data constraints goals model approach
√
Xu, Liu, and Wang (2008) MINLP Spanning tree Min(C1+C4+C14), Max R
based GA
√
Selim and Ozkarahan (2008) MILP CPLEX Min(C2+C4), Min(C1), Max R
√
Xu, He, and Gen (2009) MILP Spanning tree Min(C1+C4)
based GA
√
Pishvaee and Torabi (2010) MILP LINGO Min(C1+C4+C5+C6+C16), Min
(Delivery tardiness)
√
Qin and Ji (2010) [1]
- GA integrated Min(C1+C4+C16+C18)
with fuzzy
simulation
√
Zarandi, Sisakht, and Davari MILP CPLEX Min(C1 +C7+C4), Max R
(2011)
√
Pishvaee, Torabi et al. (2012) MILP LINGO Min(C1+C4+C5+C7+C11), Min E
√
Pishvaee and Razmi (2012) MILP LINGO Min(C1+C4+C5+C16), Min E
√
Pishvaee, Razmi, and Torabi MILP LINGO Min(C1 +C4+C5+C11), Max S
(2012)
√
Vahdani et al. (2012) MILP GAMS Min(C1+C4+C5+C6+C16),
√
Bouzembrak, Allaoui, Goncalves, MILP CPLEX Min(C1+C3+C4+C6)
Bouchriha, and Baklouti (2013)
√
Vahdani, Tavakkoli-Moghaddam, MILP GAMS Min(C1+C4+C5+C6+C16),
and Jolai (2013) Min(Disruption cost)
√
Vahdani, Tavakkoli-Moghaddam, MILP GAMS Min(C1+C4+C5+C6+C16),
Jolai, and Baboli (2013) Min(Disruption cost)
√
Jouzdani, Sadjadi, and Fathian MINLP LINGO Min(C1+Traffic congestion cost)
(2013)
√ √
Mirakhorli (2014) MILP GA Min(C1+C4+C5+C6+C16), Min
(Service time)
√ √
Balaman and Selim (2014) MILP CPLEX Min(I-C1-C2-C4-C6-C7-C8), Min
(Unused waste)
√
Jindal and Sangwan (2014) MILP LINGO Max(I–C1-C4-C8-C16)
√
Vahdani, Dehbari, Naderi-Beni, MILP Imperialist Min(C1+C4), Max(Reliability of
and Kh (2014) competitive facilities)
algorithm (ICA)
√
Ramezani, Kimiagari, Karimi, and MILP CPLEX Max(I-C1-C3-C4-C5-C6-C8-C10-
Hejazi (2014) C16), Max R
√
Pishvaee et al. (2014) MILP Benders’ Min(C1+C4+C5+C6+C7+C11
decomposition +C16-C19), Min E, Max S
√
Bai and Liu (2016) MILP LINGO Min(C1+C4+C5+C8)
√
Özceylan and Paksoy (2014) MINLP GAMS Min(C1), Min(C4), Min(C8),
Min(C16)
√
Subulan, Taşan, and Baykasoğlu MILP CPLEX Min(C1+C4+C5+C8+C16-I), Max
(2014) (Coverage of return products),
Max (flexibility)
√
Subulan, Baykasoğlu et al. (2014) MILP CPLEX Min(C1+C4+C5+C8+C16-I), Max
(Coverage of return products)
√
Tong, Gleeson, Rong, and You MILP CPLEX Min(C1 +C3+C4
(2014) +C5+C6+C7+C11-Government
incentives)
√
Sadjadi, Soltani, and - Memetic Min(C1+C2+C4), Min (Variance
Eskandarpour (2014)[2] algorithm of constrains’ deviations)
√
Mousazadeh et al. (2015) MILP CPLEX Min(C1+C3+C4+C5+C7+C11),
Min(Max(unsatisfied demand))
√
Torabi et al. (2016) MILP CPLEX Min(C1+C4+C5+C6+C14+C16)
√
Hatefi et al. (2015a) MILP CPLEX Min (C1+C4+C5+C6+C16
+Disruption cost)
√
Hatefi et al. (2015b) MILP CPLEX Min (C1+C4+C5+C6
+C16+Disruption cost)
√
Fallah, Eskandari, and Pishvaee MINLP GAMS Max(I-C4-C5-C16)
(2015)
√
Sadghiani et al. (2015) MILP CPLEX Min(C1+Capital costs for
transportation modes), Min M1 ,
Min M2
√
Babazadeh et al. (2017)[3] MINLP[1] CPLEX Min(C1+C3 +C4
+C5+C6+C7+Importing cost),
Min E
Table’s summary: Exact algorithms: 3%, Heuristic algorithms: 0%, MILP: 88%, Single objective (Minimization: 27%, Maximization:
Meta-heuristics: 18%, Commercial solvers: 79% MINLP: 12% 6 %), Multiple objectives: 67%
[1], [2], The crisp transformed model is not presented in these studies. [3]In this study, the MINLP model is transferred to an MILP one.
models with disruptions in the literature are single period and only tion. It is worthwhile to focus more on designing SC networks for
a few papers such as Klibi and Martel (2012a) and Klibi and Martel specific industries in business SCs and applications in non-business
(2013) can be found which are multi-period. SCs. Moreover, due to difficulties in collecting, preparation, and ag-
Survey papers by Tang (2006a), Tang (2006b), Tang and Tom- gregation huge data sets, only 20% of reference papers concerned
lin (2008), and Tang and Musa (2011) introduced mitigation strate- real-life case studies. In this regard, big data analytics tools and
gies which could be utilized to improve SC’s resiliency in the face techniques would be helpful for future research works.
of risks. Moreover, some mitigation strategies expressed by Tang In terms of the type of logistics networks, about 20% of papers
(2006a) and Tang and Tomlin (2008) can be applicable for deal- treated the applications of RL or CLSC networks in Table 12. Here,
ing with operational risks in SCs, which reveals the fact that they the biomass/biofuel, chemical, gas/hydrogen, and pharmaceutical
are not developed only for disruption risks. However, in SCND, SCs include 28%, 10%, 10%, and 5% of studies, respectively. Thus,
these strategies have been applied to handle a SC under the unit can be concluded that researchers have paid more attention to
certainty induced by disruptions. Further, a few papers employed biofuel/biomass SCs recently. Furthermore, a review and system-
mitigation strategies for designing a resilient SC network. Here, atic classification on biomass to energy SC networks is presented
we explore the most popular mitigation strategies in the related by Balaman and Selim (2015).
literature:
7. Discussion, conclusions, and future research directions
Facility fortification: In this strategy, some facilities are chosen
for an existing SC network or during the design phase of
In this paper, a comprehensive review was presented on the
a SC network in order to fortify them against various dis-
studies in the area of SCND problem under uncertainty. The
ruptions. Hasani and Khosrojerdi (2016), Li and Savachkin
decision-making environments under uncertainty were divided
(2016), and Qin, Liu, and Tang (2013) utilized this strategy.
into three categories in Section 3. In general, the uncertainty
Strategic stock: Using this strategy, a SC can hold the inventory
sources include (1) the existing uncertainty in parameters such as
for raw materials, semi-finished and finished products in its
supply, demand, and costs, which are inherently uncertain, and (2)
facilities within different layers of SC. This inventory is often
the uncertainty caused by natural or man-made disruptions. Fewer
utilized to satisfy the needs of customers and other man-
than 20% of studies considered the second uncertainty source in
ufacturing processes. Benyoucef, Xie, and Tanonkou (2013),
their problems. Therefore, addressing reliable and resilient SC net-
Hasani and Khosrojerdi (2016), Mak and Shen (2012), Qi and
works under disruption risks will have high potential as a future
Shen (2007), and Qi, Shen, and Snyder (2010) employed this
research direction. In this paper, we answered the questions men-
strategy.
tioned in the introduction section. For this aim, the studies were
Sourcing strategy: As pointed out by Snyder et al. (2016), this
investigated from two principal perspectives involving (1) SCM as-
strategy is divided into multiple sourcing and backup sourc-
pects, and (2) optimization aspects. In this section, a discussion is
ing. In the multiple one, sourcing is carried out by using
presented and several future research directions on the basis of
multiple suppliers simultaneously before disruption occur-
literature’s gaps are provided from these two perspectives, sepa-
rence. However, the backup sourcing exploits backup suppli-
rately.
ers when primary suppliers are disrupted. Cui et al. (2010),
Hasani and Khosrojerdi (2016), Klibi and Martel (2012a), 7.1. SCM aspects in SCND under uncertainty
Klibi and Martel (2013), Mak and Shen (2012), Qi and Shen
(2007), and Li et al. (2013) used one or both strategies. The integration of strategic SC decisions and the other ones re-
lated to tactical/operational levels in a comprehensive model under
6. Applications and real-word case studies for SCND uncertainty will be a future research direction. More specifically,
a few reference papers coped with decisions such as routing and
Here, some studies that deal with applications of SCND prob- price of products. Pricing of products and revenue management is-
lem under uncertainty have been reviewed. In this regard, some sues are addressed by some studies (e.g., Ahmadi-Javid & Hosein-
of them investigated real-life case studies and some others solved pour, 2015; Fattahi et al., 2015) for deterministic problems, and
randomly generated test instances in an industrial context. One of these studies have the potential to be extended for an uncertain
the essential challenges in designing a SC network based on a spe- environment. Moreover, a small number of papers have dealt with
cific industrial context is that the design decisions have to be often vehicle routing decisions in a SCND problem under uncertainty, all
made according to required processes for producing products (e.g., of which considered routing decisions only for one layer of SC net-
Schütz et al. (2009) and Govindan and Fattahi (2017) that studied work. Hence, this area requires more attention in the sense that
a SC for a meat and glass industry, respectively). we may make routing decisions for more than one layer of SC or
In a survey paper by Barbosa-Povoa (2014), SCs formed for pro- consider the vehicles with different types and capacities. Further,
cess industries, named as process SCs, are examined. For this aim, as pointed out in Section 4.2, many studies made inventory and
the real-life case studies are divided into five major types, in- design decisions simultaneously for single or multiple layers of a
cluding agricultural, biomass/biofuel, gas/hydrogen, pharmaceuti- SC network. However, making such decisions for SCs with highly
cal, and oil SCs. perishable products such as blood SCs often depends on the prod-
Unlike studies related to business SCs, non-business SC models ucts’ characteristics and life cycle. There has not been any study
are often developed based on a specified application. In Table 12, that handles this aspect in SCND under uncertainty and hence it
the reference papers developed for specific application or indus- promises to be an interesting future research topic.
try and the ones that examined some real-world case studies are Only 32% of reference papers took a planning horizon with mul-
listed. In the column for real-life case study, the dashes mean that tiple periods into account. Due to the strategic nature of SCND
the related reference paper did not examine a real-life case study decisions, defining strategic periods will help a decision maker to
and solved some randomly generated test instances for the consid- have the opportunity of changing strategic decisions in future with
ered industry or application. respect to the volatile business environment. Additionally, tactical
As shown in Table 12, about 24% of reference papers defined or operational periods can capture changes in the parameters as-
their SC networks on the basis of a specific industry or applica- sociated with these decision levels. Thus, developing comprehen-
Table 12
Applications and industrial contexts addressed in the related literature.
Articles Non-business A specific industry or application Real-life case study

supply chain
Realff et al. (2004) Recovery network for carpet recycling A case study in USA
Listeş and Dekker (2005) Recovery network for recycling sand A case study in Netherlands
Guillen et al. (2006) A supply chain for chemical industry –
You and Grossmann (2008a) A supply chain for polystyrene industry –
Rappold and Van Roo (2009) A supply chain for handling reparable items –
Guillén-Gosálbez and Grossmann (2009) A supply chain for chemical industry A case study in Europe
Schütz et al. (2009) A supply chain for meat industry A case study in Norway
Guillén-Gosálbez and Grossmann (2010) A supply chain for chemical industry A case study in Europe
Lee et al. (2010) A supply chain for an international electrical A case study in Asia Pasific region
company
Sabio et al. (2010) Hydrogen supply chain A case study in Spain
Kim et al. (2011) Biofuel supply chain A case study in southern part of USA
Giarola et al. (2012) Ethanol supply chain –
√
Noyan (2012) A supply chain network for distributing relieif –
supplies after occurrence of a disaster
Chen and Fan (2012) Bioethanol supply chain A case study in the state of California (USA)
Almansoori and Shah (2012) Hydrogen supply chain A case study in Great Britain
Gebreslassie et al. (2012) Hydrocarbon biorefinery supply chain A case study in the state of Illinois (USA)
Kazemzadeh and Hu (2013) Biofuel supply chain A case study in the state of Iowa (USA)
Baghalian et al. (2013) A supply chain for an agri-food industry The rice industry of a country in the Middle
East
Jouzdani et al. (2013) Milk and dairy supply chain A case study in Iran
Tong et al. (2013) Hydro carbon biofuel and petroleum supply –
chain
Balaman and Selim (2014) Bioenergy supply chain A case study in Turkey
√
Jeong et al. (2014) A supply chain network for distributing relieif A case study in the state of South Carolina
supplies after occurrence of a disaster (USA) based on historical disasters
Marufuzzaman et al. (2014) Biofuel supply chain A case study in the southeast region of USA
√
Jabbarzadeh et al. (2014) A supply chain network for blood distribution A case study for Tehran’s earthquake
after occurrence of a disaster
Zokaee et al. (2014) Bread supply chain A case study in Iran
Tong, You et al. (2014) and Tong, Gleeson et al. Hydro carbon biofuel supply chain A case study in the state of Illinois (USA)
(2014)
Madadi et al. (2014) Pharmaceutical supply chain –
Li and Hu (2014) Biofuel supply chain A case study in the state of Iowa (USA)
√
Liu and Guo (2014) A supply chain network for distributing relieif A case study based on Great Wenchuan
supplies after occurrence of a disaster earthquake in China
Pishvaee et al. (2014) A CLSC for medical needle and syringe industry A case study for an industry in Iran
Subulan, Taşan et al. (2014) and Subulan, A CLSC for lead/acid battery industry A case study for an industry in Turkey
Baykasoğlu et al. (2014)
Dayhim et al. (2014) Hydrogen supply chain A case study in the state of New Jersey (USA)
Ayvaz et al. (2015) RL for waste management of electrical and A case study in Turkey
electronic equipments
Hasani et al. (2015) and Hasani and A CLSC for medical devices industry A case study in Iran
Khosrojerdi (2016)
Mousazadeh et al. (2015) Pharmaceutical supply chain A case study in Iran
Babazadeh et al. (2017) Biodiesel supply chain A case study in Iran
Govindan and Fattahi (2017) A supply chain for glass industry A case study in Iran
sive models under uncertainty with multiple periods requires more Designing humanitarian SC networks needs more investigations,
attention. In particular, deterministic multi-period SCND problems and indeed many studies in this area can be done with respect
in which there exists the possibility of changing the location and to different disaster types and desired applications. Sometimes, it
capacity of facilities over different strategic periods, have been may not be possible to satisfy all demands in humanitarian SC net-
widely addressed (e.g., Melo et al., 2006; Thanh, Bostel, & Péton, works, so there is a need to develop models considering fairness
2008). These studies also have potential to be extended for an un- for shortages that may occur at different demand points. More-
certain decision-making environment. Moreover, we could not find over, demand points in this type of network often need different
any SCND study under uncertainty that deals with a planning hori- commodities, but their priority varies. This aspect has been rarely
zon where strategic and tactical periods are integrated. regarded in humanitarian SC networks. In general, two aspects that
As shown by Fig. 9, a few papers addressed social responsibility should be considered by researchers in this area are: (1) planning
or environmental aspects in designing SC networks under uncer- decisions, network structure and performance measures depend on
tainty. Nevertheless, government legislation and customers’ aware- the considered application and can be quite different from business
ness have caused most corporations and organizations to pay more SCs; and (2) modeling uncertain parameters is contingent upon the
attention to these issues. Evidently, more research is still required type and magnitude of disasters.
on these aspects, whose significances have been emphasized and Designing responsive SC networks has been examined by only
raised by social and environmental concerns. Further, dealing with 12% of reference papers. In these studies, the fill rate of customers’
financial factors and different types of competitions in SCND prob- demands and their service time are often used as performance
lems under uncertainty are another two potential research areas. measures for evaluating the responsiveness of SC. In all of these
Farahani et al. (2014) surveyed competitive SCND and represented studies, customers’ demand is not dependent on the responsive-
the existing research gaps in this area. ness of SC. Nonetheless, in today’s competitive business environ-
ment, designing a SC network in which customers’ demand is sen- As mentioned before, there exist two types of risks including
sitive to SC’s responsiveness is a valuable future research. More- operational and disruption risks in a SC, for which risk manage-
over, defining other criteria for the SC’s responsiveness based on ment plays an indispensable role in reducing these existing risks.
business goals of companies is of importance in different applica- Because only a few papers addressed this issue, risk management
tions. in SCND problem is a potential future research direction. By explor-
Finally, there were a few papers to cope with real-world sit- ing the papers in Section 5.5, it can also be highlighted that most
uations. The reason is twofold: (1) the necessity for collecting a ones utilized the well-known risk measures for alleviating the risks
large data set to model comprehensive SCND problems, and (2) the based on their economic objectives such as SC’s cost or profit.
difficulties in obtaining correct estimates for uncertain parameters. However, studying the SC’s risk based on other strategic goals of SC
Thus, it would be worthwhile to carry out studies based on a SC such as responsiveness is still a challenge. It is worth noting that
network defined for real-life case studies. Heckmann et al. (2015) discussed this research gap in the area of
supply chain risk management with more details. Moreover, most
7.2. Optimization aspects in SCND under uncertainty SCND models with disruption risks are single period in the related
literature. However, disruptions can affect the SC’s performance for
In this paper, assorted modeling frameworks that have been ap- a long time. Thus, developing SCND models under a planning hori-
plied for SCND problems under uncertainty were introduced and zon with multiple periods and modeling uncertain effects of dis-
thus the studies were investigated in terms of their developed so- ruptions over this planning horizon is another concern. Further, a
lution methodologies and mathematical models. In this section, re- number of papers employed some mitigation strategies for manag-
search gaps and potential future research guidelines in terms of ing SC’s disruption risks, as discussed in Section 5.8. However, as
optimization aspects are discussed. pointed out by Tang (2006a) and Tang and Tomlin (2008), there are
More than 50% of reference papers made use of commercial other mitigation strategies such as flexible manufacturing process,
solvers to solve their optimization problems. This fact demon- responsive pricing, supply contracts, and so on that can be used for
strates two practical issues. Firstly, commercial solvers have had designing resilient SCs. Hence, future research works may develop
significant progress over recent years such that they have suitable SCND models based on these other strategies and assess their ef-
performance in solving optimization problems in this area. Sec- fectiveness. It is worth mentioning that using mitigation and con-
ond, many industries would prefer to exploit a proven commercial tingency strategies simultaneously is another interesting future re-
solver for solving smaller problem instances instead of using a cus- search for designing resilient SC networks.
tom designed solution approach, which results in an approximate Robust SCND has gained less attention in comparison with
solution. fuzzy and stochastic programs. However, it must be noted that
A few studies applied meta-heuristics approaches. Due to the in many real-world applications, enough historical data are not
NP-hardness nature of SCND problem under uncertainty, develop- present to estimate parameters’ distributions, but robust optimiza-
ing this type of solution approaches still remains a future research tion is a suitable tool for handling such a situation. Using AARC
direction. It is worth noting that meta-heuristics cannot guaran- and DRO approaches in the area of SCND problems is another re-
tee the optimal solution for an optimization problem. However, search direction for which there has not been any paper in the
these approaches can solve large-scale problems within appropri- related literature. Additionally, developing modeling approaches in
ate time. Therefore, developing this kind of solution approaches the context of SCND problem that fill out the gap between stochas-
is worthwhile. Further, presenting solution algorithms, which are tic programming and RO could be an interesting research idea.
based on the combination of exact methods with heuristics or In addition to these aspects, exploring new applicable robustness
meta-heuristics is another future area of research. measures to address solution or model robustness will be another
In scenario-based stochastic programs for SCND, Benders’ de- promising research direction.
composition or L-shaped method, as exact approaches, were Simulation is a powerful tool to validate obtained policies in
widely applied due to the problem’s special structure. However, ex- uncertain decision-making environments and unfortunately, such a
act solution approaches for problems with minimax or weighted methodology has been rarely examined in the related SCND litera-
mean-risk objectives are still scarce and will be welcomed by ture. In addition, to the best of our knowledge, there has not been
researchers and practitioners. In addition, developing multi-stage any research to compare different modeling philosophies such as
stochastic programs and presenting efficient solution approaches stochastic programming, RO, and fuzzy programming to design a
for them is another challenging issue, and it needs greater consid- SC network under uncertainty. Therefore, a systematic comparison
eration. In this regard, the progressive hedging algorithm, an appli- between these modeling approaches will be required.
cable method for solving two and multi-stage stochastic programs, The last conclusion that can be drawn from this survey paper
has been used scarcely in the related literature. is while there are many research studies for SCND problem un-
Another significant aspect for scenario-based stochastic pro- der uncertainty, this research area still needs more studies present-
grams is to generate an efficient set of scenarios to model un- ing realism models based on real-world applications and handling
derlying stochasticity in SCND. More importantly, evaluating sce- computational aspects to solve large-sized problems.
nario generation methods in terms of stability and quality criteria
should be examined in SCND problem as well. There are different Acknowledgment
approaches to deal with scenario generation and reduction in the
Stochastic Programming community (e.g., Dupačová et al., 2003; The authors would like to thank the editor and the anonymous
Heitsch & Römisch, 20 03; Høyland & Wallace, 20 01) that can be reviewers for their invaluable comments which improved this pa-
applied in this research area. per significantly.
Appendix A. Features and structure of logistics networks in the related literature
Table A.1
Features and structure of supply chain networks and forward networks in closed-loop supply chains in the related literature. (F and TL are abbreviations of facilities and
transportation links, respectively).
Articles Paper’s RLN # of location Multiple Flows Uncertain Disruption in Decision-

number layers commodities parameters in forward network making
forward environment
Intra-layer Direct flows F TL
network group
flows to customers
from upper
layers
√
Sabri and Beamon (20 0 0) [1] 2 D, ST, PT G1
√
Tsiakis et al. (2001) [2] 2 D G1
Daskin et al. (2002) [3] 1 D G1
√
Hwang (2002) [4] 1 AF G1
Shen et al. (2003) [5] 1 D G1
√ √
Alonso-Ayuso et al. (2003) [6] 1 D, C, P, PR G1
√
Guillén et al. (2003) [7] 2 D G1
Miranda and Garrido (2004) [8] 1 D G1
Shen (2005) [9] 1 D G1
Shen and Daskin (2005) [10] 1 D G1
Avittathur et al. (2005) [11] 1 D G1
√
Guillén et al. (2005) [12] 2 D G1
√
Aghezzaf (2005) [13] 1 D G1
√ √ √
Santoso et al. (2005) [14] 3 D, S, C, CA G1
Shu et al. (2005) [15] 1 D G1
√
Guillen et al. (2006) [16] 3 D G1
√ √
Vila et al. (2007) [17] 1 D (Agreements/ G1
contracts with
customers)
Romeijn et al. (2007) [18] 1 D G1
√
Qi and Shen (2007) [19] 1 D, AF G1
Shen and Qi (2007) [20] 1 D G1
Snyder et al. (2007) [21] 1 DP G1
Goh et al. (2007) [22] 1 D, FP G1
√
Listeş (2007) [23] 1 D G1
Shen (2007a) [24] 1 D G1
√ √
Lee et al. (2007) [25] 1 D G1
√ √
Salema et al. (2007) [26] 2 D G1
Xu et al. (2008) [27] 2 D,C G3
√ √
Chouinard et al. (2008) [28] 1 D G1
Miranda and Garrido (2008) [29] 1 D G1
√
Poojari et al. (2008) [30] 3 D G1
√
Selim and Ozkarahan (2008) [31] 2 FG G3
√ √
You and Grossmann (2008a) [32] 2 D G1
You and Grossmann (2008b) [33] 1 D G1
Tanonkou et al. (2008) [34] 1 D, ST G1
√
Azaron et al. (2008) [35] 1 D, C, S G1
Rappold and Van Roo (2009) [36] 2 D, PT G1
√
Guillén-Gosálbez and [37] 2 EP G1
Grossmann (2009)
√ √
Lee and Dong (2009) [38] 1 D G1
√ √ √
Schütz et al. (2009) [39] 3 D, S, C, CA G1
√
Pishvaee et al. (2009) [40] 2 D, C G1
Xu et al. (2009) [41] 3 D, S, C G3
You and Grossmann (2009) [42] 1 D G1
√
Franca et al. (2010) [43] 2 D G1
Javid and Azad (2010) [44] 1 D G1
√
Qi et al. (2010) [45] 1 D, AF G1
Park et al. (2010) [46] 2 D G1
√ √
Lee et al. (2010) [47] 2 D, C, CA G1
√
Guillén-Gosálbez and [48] 2 EP G1
Grossmann (2010)
Pan and Nagi (2010) [49] >3 D G1
√
Nasiri et al. (2010) [51] 1 D G1
√
Sabio et al. (2010) [52] 2 C G1
√
Pishvaee and Torabi (2010) [53] 1 D, C, CA G3
√
Cui et al. (2010) [54] 1 AF G1
Shu et al. (2010) [55] 1 D G1
√
Mo et al. (2010) [56] 2 D G1
√
Bidhandi and Yusuff (2011) [58] 2 D, C, CA G1
√
Longinidis and Georgiadis [59] 2 D, P, CA, SS G1
(2011)
Table A.1 (continued)

forward environment
network group
flows to customers
from upper
layers
√
Georgiadis et al. (2011) [60] 2 D, CA, SS, lower G1
and upper
bounds of
supply chain’s
flows
√ √
Shukla et al. (2011) [61] 1 AF, AT G1
Cardona-Valdés et al. (2011) [62] 1 D G1
Shimizu et al. (2011) [63] 1 D, C, P G1
√
Kim et al. (2011) [64] 2 D, S, P, CP G1
√ √
Zarandi et al. (2011) [65] 2 FG G3
√
Peng et al. (2011) [66] 1 AF G2
Rajgopal et al. (2011) [67] 1 D, C, S, Salvage G1
value of
products
√
Giarola et al. (2012) [68] 1 C, P G1
√
Kiya and Davoudpour (2012) [69] 1 D, C G1
√
Abdallah et al. (2012) [70] 1 D G1
√ √ √
Noyan (2012) [71] 1 D, C, CA, DC G1
√
Jabbarzadeh et al. (2012)) [72] 1 DC G1
√
Mak and Shen (2012) [73] 1 D, AF G1
Chen and Fan (2012) [74] 2 D, S G1
√ √
Klibi and Martel (2012a) [75] 1 D, CA G1
√ √
Almansoori and Shah (2012) [76] 3 D G1
Pishvaee, Torabi et al. (2012) [77] 2 D, C, CA, EP G3
√
Gebreslassie et al. (2012) [78] 1 D, S G1
√ √
Hasani et al. (2012) [79] 1 D, PR G2
√
Nickel et al. (2012) [80] 1 D, FP G1
√
Pishvaee and Razmi (2012) [81] 1 D, C, CA G3
Pishvaee, Razmi et al. (2012) [82] 2 D,C, CA, PS G3
√
Vahdani et al. (2012) [83] - FG, C, CA, CP G1&G2&G3
√ √
Amin and Zhang (2013) [84] 1 D G1
√
De Rosa et al. (2013) [85] 2 D G1
Benyoucef et al. (2013) [86] 1 D, ST G1
Albareda-Sambola et al. (2013) [87] 1 D, C, Minimum G1
number of
facilities and
customers to
be opened and
serviced,
respectively
Kazemzadeh and Hu (2013) [88] 1 C, P, S G1
√
Pimentel et al. (2013) [89] 1 D G1
√
Qin et al. (2013) [90] 1 AF G1
√ √
Ramezani et al. (2013a) [91] 2 D, C, P G1
√ √
Ramezani et al. (2013b) [92] 2 D G2
√
Longinidis and Georgiadis [93] 2 D, P, FP, SS G1
(2013)
√ √
Bouzembrak et al. (2013) [94] 2 D, S, C G3
√
Kumar and Tiwari (2013) [95] 2 D G1
Azad and Davoudpour (2013) [96] 1 D G1
√ √ √ √
Cardoso et al. (2013) [97] 3 D G1
√ √ √
Baghalian et al. (2013) [98] 2 D, AF, AT G1[1]
√ √ √
Vahdani, [99] 1 D, C, CA, CP, AF, G1&G3
Tavakkoli-Moghaddam, and CS
Jolai (2013)
√
Ahmadi-Javid and Seddighi [100] 1 CA, Annual G1
(2013) number of
vehicles’ visits
Singh et al. (2013) [101] 1 D G1
√ √
Vahdani, [102] - D, C, CP, CS G1&G3
Tavakkoli-Moghaddam, Jolai,
and Baboli (2013)
Jouzdani et al. (2013) [103] 3 D G3
√
Li et al. (2013) [104] 1 AF G1
√ √
Azad et al. (2013) [105] 1 CA, AT G1
Tong et al. (2013) [106] 3 D, S, C, G1
Governmental
incentives
Table A.1 (continued)

forward environment
network group
flows to customers
from upper
layers
√
Klibi and Martel, (2013) [2] [107] 1 D, CA G1
√
Nasiri et al. (2014) [108] 1 D G1
√
Tian and Yue (2014) [109] 2 D, C, CS G1
√
Mirakhorli (2014) [110] 2 D, FG G3
√
Meisel and Bierwirth (2014) [111] 3 Arrivals of G1
customers’
orders, PT, TT
Jabbarzadeh et al. (2014) [112] 1 D, C, S, CA G1
Madadi et al. (2014) [113] 1 S (the fraction G1
of tainted
production at
facilities)
√
Mari et al. (2014) [114] 2 AF G1
√
Jeong et al. (2014) [115] 2 AF G1
√
Balaman and Selim (2014) [116] 2 FG G3
√ √
Jindal and Sangwan (2014) [117] - D, C, CA G3
√
Marufuzzaman et al. (2014) [118] 2 AF G1
√
Vahdani et al. (2014) [119] - C G3
Li and Hu (2014) [120] 2 PR, CP, S G1
Cardona-Valdés et al. (2014) [121] 1 D G1
√ √
Azad et al. (2014) [122] 1 CA, AT G1
√ √
Ramezani et al. (2014) [123] 2 D, C, CA, P G3
√
Liu and Guo (2014) [124] 1 D, Amount of G1
critical
populations
√
Jin et al. (2014) [125] 2 D, C G1
Rodriguez et al. (2014) [126] 2 D G1
Yongheng et al. (2014) [127] 2 D G1
√
Pishvaee et al. (2014) [128] 1 D, C, CA, EP, PS G3
√ √
Soleimani et al. (2014) [129] >3 D, P G1
√
Li and Savachkin (2016) [130] 1 AF G1
√
Bai and Liu (2016) [131] 2 D, C G3
√
Huang and Goetschalckx (2014) [132] 3 D, C, CA, P G1
Zokaee et al. (2014) [133] 2 D, C, S G2
√ √ √
Zeballos et al. (2014) [134] 3 D, S G1
√
Özceylan and Paksoy (2014) [135] - D, C, CA G3
√
Dayhim et al. (2014) [136] 2 D G1
√ √
Hatefi and Jolai (2014) [137] 2 D, AF G1&G2
√ √
Subulan, Taşan et al. (2014) [138] 1 FG G3
√ √
Subulan, Baykasoğlu et al. [139] 1 D, C, maximum G1&G3
(2014) allowable
distance
between SC
entities
√ √
Tong, Gleeson et al. (2014) [140] 3 D, S, CP G3
√ √
Tong, You et al. (2014) [141] 3 D, S G2
√ √
Mousazadeh et al. (2015) [142] 3 D, C, SS G3
√
Li et al. (2015) [143] 1 AT G1
√
Pasandideh et al. (2015) [144] 1 D, C, PT G1
√
Kılıç and Tuzkaya (2015) [145] 1 D, P G1
√ √
Torabi et al. (2016) [146] 2 D, C, CA G2&G3
√ √
Khatami et al. (2015) [147] - D G1
√ √
Hasani et al. (2015) [148] 3 D, C G2
√ √
Hatefi et al. (2015a) [149] 2 D, C, CA G1&G3
√ √
Hatefi et al. (2015b) [150] 2 D, C, CA G1&G3
√
Fallah et al. (2015) [151] 2 D, C, CA G3
√
Akbari and Karimi (2015) [152] 1 CR G2
√ √
Sadghiani et al. (2015) [153] 1 D, C, CA, TT, S G1&G3
√ √
Dubey et al. (2015) [154] 1 D G2
√
Govindan et al. (2015) [155] 3 D G1
√
Keyvanshokooh et al. (2016) [156] 2 D, C G1&G2
√ √
Hasani and Khosrojerdi (2016) [157] 3 D, C, CA, S G1&G2
√
Babazadeh et al. (2017) [158] >3 D, C, S, EP G3
√
Govindan and Fattahi (2017) [159] 2 D G1 - G2
[1] In this study, both scenario based and continuous stochastic parameters are considered.
[2] This study proposed a generic mathematical model; however, the Table’s information is based on the location-transportation case studies that were solved by the study.
Table A.2
Features and structure of reverse logistics networks and reverse network in closed-loop supply chains in the related literature.
Articles Paper’s FLN # of Multiple Uncertain Disruption in Decision-

number location commodities parameters reverse network making
layers in reverse environment
Facilities Transportation
network group
links
√
Realff et al. (2004) [160] 1 R, SP G2
Listeş and Dekker (2005) [161] 2 R, DS G1
√
Listeş (2007) [23] 1 R G1
√ √
Lee et al. (2007) [25] 1 R, PA G1
Lieckens and Vandaele (2007) [162] 1 Inter-arrival time of G1
returns, PT
√ √
Salema et al. (2007) [26] 2 R G1
√ √
Chouinard et al. (2008) [28] 2 R, DS, DR, PA G1
√ √
Lee and Dong (2009) [38] 1 R G1
√
Pishvaee et al. (2009) [40] 3 R, C, DR G1
√ √
Lee et al. (2010) [47] 2 R, C, CA G1
√
Pishvaee and Torabi (2010) [53] 3 R, C, CA, DS, DR G3
Qin and Ji (2010) [163] 1 R, C G3
Kara and Onut (2010a) [164] 1 R, DS G1
Kara and Onut (2010b) [165] 2 R, DS G1
√
Pishvaee et al. (2011) [166] 3 C, CA, DS, R G2
√ √
Zarandi et al. (2011) [65] 1 FG G3
√
Abdallah et al. (2012) [70] 1 R G1
√ √
Hasani et al. (2012) [79] 1 - G2
√
Pishvaee and Razmi (2012) [81] 1 R, C, CA G3
√ √ √
Vahdani et al. (2012) [83] 1 FG, C, AF G1&G2&G3
√ √
Amin and Zhang (2013) [84] 2 R G1
√
De Rosa et al. (2013) [85] 2 R G1
√ √
Ramezani et al. (2013a) [91] 2 R, C G1
√ √
Ramezani et al. (2013b) [92] 2 R G2
√ √
Cardoso et al. (2013) [97] 3 - G1
√ √ √
Vahdani, Tavakkoli-Moghaddam, [99] 2 R, C, CA, PA, AF, CS G1&G3
and Jolai (2013)
√ √ √
Vahdani, Tavakkoli-Moghaddam, [102] 2 R, C, CA, PA, AF, CS G1&G3
Jolai, and Baboli (2013)
√
Mirakhorli (2014) [110] 2 R, FG G3
√ √
Jindal and Sangwan (2014) [117] 3 R, C, CA, PA, PP G3
√ √
Vahdani et al. (2014) [119] 3 R, C, CA, DS, AF G3
√ √
Ramezani et al. (2014) [123] 2 R, C, CA, DR, PA G3
√
Pishvaee et al. (2014) [128] 1 R, C, CA, EP, PS G3
√ √
Soleimani et al. (2014) [129] >3 R, DS, SP, BP G1
√ √
Zeballos et al. (2014) [134] >3 R G1
√
Özceylan and Paksoy (2014) [135] 1 R, C, CA G3
√ √
Hatefi and Jolai (2014) [137] 3 R, DR, AF G1&G2
√ √
Subulan, Taşan et al. (2014) [138] 2 FG G3
√ √
Subulan, Baykasoğlu et al. (2014) [139] 2 R, C, DR, BP, PA, SP, G1&G3
maximum number of
opened facilities,
maximum allowable
distance for collecting
return products
√
Sadjadi et al. (2014) [167] 1 R G3
√
Kaya et al. (2014) [168] 2 R, DS G1
√
Soleimani and Govindan (2014) [169] 3 DS, BP, SP G1
√ √
Torabi et al. (2016) [146] 3 R, C, CA G2&G3
√ √
Khatami et al. (2015) [147] 2 R G1
√ √
Hasani et al. (2015) [148] 1 DS G2
√ √
Hatefi et al. (2015a) [149] 3 R, C, CA G1&G3
√ √
Hatefi et al. (2015b) [150] 3 R, C, CA G1&G3
√
Fallah et al. (2015) [151] 3 R, C, CA G3
√ √
Dubey et al. (2015) [154] 2 R G2
√
Ayvaz et al. (2015) [170] 3 R, C, PA G1
√
Keyvanshokooh et al. (2016) [156] 2 R, C G1&G2
Appendix B. Mathematical definition of well-known risk measures in the related literature
Table B.1
Definition of well-known risk measures for loss/cost distributions.
Risk measure Definition
Variance ρ (Y ) = E[(Y − E(Y ))2 ]

Absolute deviation ρ (Y ) = E[
|Y − E(Y )|]
Standard deviation ρ (Y ) = E[(Y − E(Y ))2 ]
Conditional value at risk ρ (Y ) = CVaRα (Y ) = inf{z + 1
1 −α
E[(Y − z )+ ]}
z∈R
pth central semideviation ρ (Y ) = (E[(Y − E(Y ))+p ])1/p
pth semideviation from target T ρ (Y ) = (E[(Y − T )+ ])
p 1/p
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SCND Under Uncertainty Review

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European Journal of Operational Research 263 (2017) 108–141

Contents lists available at ScienceDirect

European Journal of Operational Research

Production, Manufacturing and Logistics

Supply chain network design under uncertainty: A comprehensive

1. Introduction Several review papers exist on FL models, (e.g., Daskin, 2011;

Fig. 1. Publication date distribution of reference papers.

Articles Facility location/ Scope and special features Number of shared

Fig. 4. A SC network structure with different types of product ﬂows.

Fig. 6. Frequency of uncertain parameters in the RL network of reference papers.

1 location layer Single commodity [3,4,5,8,9,10,11,13,15,18,19,20,21,22,23,24,29,33,34,42,44,45,50, [66] [53,81,128]

1 location layer Single commodity [23,70,162,164] [81,128,135,163]

cilities can be closed, opened, or reopened more than once over a

4.3. Risk management in SCND problem

Risk management in SCM has gained considerable attention in

Reference papers Share (%)

Fig. 9. Classiﬁcation of different paradigms in SCND problem under uncertainty.

Objective function terms Explanation Abbreviation

Articles Solution approach Mathematical Continuous Objective

Articles Solution approach Mathematical Continuous Objective

Benyoucef et al. (2013) LR algorithm MINLP D, ST Min(C1+C3+C4+C8+C9)

Articles Solution approach Mathematical Objective

Tsiakis et al. (2001) CPLEX MILP-TSSP Min (C1+ C4+C5+ C6)

Articles Solution approach Mathematical Objective

Almansoori and Shah (2012) CPLEX MILP-MSSP Min(C1+C2+C3+C4+C5+C7

Articles Solution approach Mathematical Objective

Subulan, Baykasoğlu, Özsoydan, CPLEX MILP Min(C1+C4+C5+C8+C16-I),

appropriate speciﬁcally when the stochastic parameters vary no-

Fig. 11. Order of observations and decisions in a T-stage stochastic program.

Articles Solution approach Mathematical Objective

Realff et al. (2004) AIMMS MILP-TSSP Min(Max(Regret(I-C1-C2-C3-C4-

Articles Solution approach Equivalent model for robust counterpart of

Exact algorithm Heuristic Meta-heuristic Commercial Mathematical Objective

Pishvaee, Rabbani, and Torabi CPLEX MILP Min(C1+C4+C14)

Articles Fuzzy mathematical programming Crisp transformed mathematical model

Ambiguous Vagueness of Vagueness of Mathematical Solution Objective

Articles Non-business A speciﬁc industry or application Real-life case study

Appendix A. Features and structure of logistics networks in the related literature

Articles Paper’s RLN # of location Multiple Flows Uncertain Disruption in Decision-

Table A.1 (continued)

Articles Paper’s RLN # of location Multiple Flows Uncertain Disruption in Decision-

Table A.1 (continued)

Articles Paper’s RLN # of location Multiple Flows Uncertain Disruption in Decision-

Articles Paper’s FLN # of Multiple Uncertain Disruption in Decision-

Appendix B. Mathematical deﬁnition of well-known risk measures in the related literature

Risk measure Deﬁnition

Variance ρ (Y ) = E[(Y − E(Y ))2 ]

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