A Bi-Objective Stochastic Closed-loop Supply Chain Network Design Problem Considering Downside Risk Amir Mohammad Fathollahi Fard Department of Industrial Engineering, University of Science and Technology of Mazandaran, Behshahr, Iran Fatemeh Gholian-Jouybari Department of Industrial Engineering, Shomal University, Amol, Iran Mohammad Mahdi Paydar Department of Industrial Engineering, Babol Noshirvani University of Technology, Babol, Iran Mostafa Hajiaghaei-Keshteli* Department of Industrial Engineering, University of Science and Technology of Mazandaran, Behshahr, Iran (Received: February 02, 2017 / Revised: March 26, 2017 / Accepted: May 01, 2017) ABSTRACT This paper deals with a closed-loop supply chain network and proposes new approaches in metaheuristics and exact methods as solution methods. Moreover, the downside risk is incorporated into the objective functions as a risk meas- ure. Hence, the developed two-stage stochastic model aims to minimize the expected total cost and the downside risk, simultaneously. Besides, this study presents the closed-loop network which considers the forward and reverse net- works in an integrated manner. In the forward network, this case just considers the forward network, while, the reverse logistic fully focused on the backward network by considering recovering centers (i.e. from recovering centers to re- manufacture, recycling and disposal centers). In order to address the problem, ICA, PSO, GA, and also ߝ-constraint method, are utilized. In addition, the parameters of algorithms are tuned by Response Surface Method (RSM) with an MODM approach. To explain the efficiency and effectiveness of methods, four assessment metrics are introduced. At the end, the results show the capability of ICA through the most of the tests problem. According to the risk manage- ment, a real data set is used to do some sensitivity analyses on the proposed model. Keywords: Two-Stage Stochastic Programming, Closed-Loop Supply Chain, Downside Risk Consideration, ߝ-Constraint method * Corresponding Author, E-mail: mostafahaji@mazust.ac.ir 1. INTRODUCTION Nowadays, designing an efficient supply chain is seemed essential to develop a successful business model. Researchers have defined the Supply Chain (SC) configu- ration as follows “an integrated system of facilities and activities consisting business functions of material pro- curement, material transformation to final products and also the distribution of these products to the end users” (Nourmohamadi Shalke et al., 2017). Besides, Supply Chain Management (SCM) forms some special approaches to product and to distribute the activity planning in different Industrial Engineering & Management Systems Vol 16, No 3, September 2017, pp.342-362 https://doi.org/10.7232/iems.2017.16.3.342 ISSN 1598-7248│EISSN 2234-6473│ © 2017 KIIE