A dynamic model for deteriorating products in a closed-loop supply chain

Abstract

The products that lose their initial value after a time period are known as deteriorating products and need more appropriate decisions for optimization in a closed-loop supply chain. The studied closed-loop supply chain consists of a manufacturer and a distributing center that are producing and distributing a deteriorating product to customers. The deteriorating products are collected from distribution center and made available by the producer. This closed-loop supply chain, which consists of four main sub-systems, is simulated using the system dynamic. The effects of three strategy groups on the main performance indicators of the model have been simulated: bargaining, better warehousing and change collection rules. Some scenarios are designed in each group and the model is simulated based on them. Total cost, total sale and total disposal are considered as the main performance indicators of the closed-loop supply chain. The results show that the best performance of these indicators is in better combining warehousing conditions and more frequent collections. In the bargaining strategy, constant rates and supply shortages also performed better.