A multi-objective fuzzy mathematical model for circular economy with leasing as a strategy

Abstract

PurposeThis paper aims at developing a multi-objective mathematical model of circular economy that integrates key concept of leasing as a strategy in addition to reuse, refurbishing, primary recycling, secondary recycling and disposal.Design/methodology/approachThis paper proposes multi-objective fuzzy mixed integer linear programming mathematical model considering multi-product, multi-echelon and multi-capacitated concepts of the circular economy. The three objectives of the proposed model, namely, economic, environmental and social are solved simultaneously using constraint approach to obtain balanced trade-off between the objective functions. The model is validated by solving a case study from the literature. The proposed model is made pragmatic for industrial application by considering multi-external suppliers multi-customer zones, multi-disassembly centers, multi-collection centers and multi-refurbishing centers and accounting for purchasing, processing, transportation, set-up costs and capacity constraints at the same time.FindingsThe results show that the leasing of the products improves the economic function in addition to the known environmental improvements. The proposed model also shows that the circular economy can generate the jobs for the unskilled people at different locations.Research limitations/implicationsThe proposed model can be further improved by considering the non-linearity due to economy of scale at various centers and in transportation. The model can be further extended to make it multi-period model.Practical implicationsThe proposed model of circular economy can be used by the organizations as a policy tool to decide the optimum number of collection centers, disassembly centers, refurbishing centers, recycling centers and disposal centers and their optimum locations and allocations. The organizations can also trade-off among economic, environmental and social benefits of their proposed decisions in circular economy.Originality/valueThe originality of the proposed mathematical model is consideration of leasing as a strategy to have better control over the supply chain for circularity; considering the training of unskilled people for backward supply chain jobs and accounting for primary recycling and secondary recycling separately for economical computation.