Abstract
The consideration of external costs is becoming more important in supply network design, as companies are under increasing pressure to reduce the environmental and social impacts of their operations. This paper presents a single time period, single-product mixed integer linear programming formulation, which considers such external costs, as well as the impact of waste disposal. The model presented considers a network of suppliers, manufacturing facilities, customers, scrap recyclers, general recycling facilities and landfill sites and makes facility location and allocation decisions so as to minimise both the economic and external costs of all network operations. The model was formulated using the What’s Best Excel add-in and tested on a commercial case study concerning the supply network operations of Hydram, a leading sheet metal fabrication company, considering three different scenarios. Details of how the external and economic costs were determined are included, with reference to the literature. By analysis of the experimental results, commercial recommendations for facility location are made, and the managerial uses of the model for socio-environmentally responsible decision-making are discussed. The benefits and limitations of the proposed model are also discussed.
Highlights
Realizing a sustainable society is one of the most challenging problems that humanity faces
We propose a systematic approach connecting the sufficiency of the daily life of a consumer and the product development process, called the living-sphere approach
To accomplish high reproducibility and market-in product development, we have proposed an extended function-structure map (EFSM), in which local or region-specific information is mapped on a traditional function-structure map, and a visualization system for the EFSM [20, 31]
Summary
Realizing a sustainable society is one of the most challenging problems that humanity faces. Sustainable development should be seen as a process that provides humanity with a pathway to survival and living a good life on Earth [4]. This trend is the same as the global trend, which includes low-income countries [13]. Realizing an SCP pattern for developed countries and developing countries is critical for global sustainability. To achieve an SCP pattern, it is necessary to consider reducing the environmental load caused by production and manufacturing and sufficiency or quality of life (QoL) of the consumer. We propose a systematic approach connecting the sufficiency of the daily life of a consumer and the product development process, called the living-sphere approach. The significance of the work and remaining issues are discussed in “Discussion”, and “Concluding remarks” are provided in the final section
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