A viable and bi-level supply chain network design by applying risk, robustness and considering environmental requirements

The study proposes a new Supply Chain Network Design (SCND) incorporating Viability with Bi-Level decisions (VSCNDBLP). Specifically, this approach uses the maximum CO₂ as the leader function, the expected value, and the maximum cost as the follower function to address this issue effectively. In addition, this study recommends implementing viability policies to manage the resiliency strategy by utilizing flexible capacity, availability coefficients, and facility reliability levels. The sustainability approach can be addressed by imposing emission constraints, while the agility method can be incorporated by prioritizing demand satisfaction. Furthermore, this research suggests focusing on risk management by utilizing stochastic optimization and ensuring robustness by integrating a robust bi-level stochastic optimization framework. This research focuses on automotive parts manufacturing, a thriving industry known for its substantial sales and significant added value. This work, which considers CO₂ policy, is compared with situations that are not considered CO₂ policy. It is found that considering CO₂ policy decreases CO₂ by up to − 3.4%, but it increases cost by up to 1.14%. Therefore, reducing CO₂ is more important than costs in this complex situation where people’s health is essential.