Circular economy-driven two-stage supply chain management for nullifying waste

Abstract

Global warming and environmental pollution are currently taking place at an alarming rate owing to excess waste generation. Food-waste is solely responsible for generating greenhouse gases that cause environmental hazards. Earlier studies are related to closed-loop supply chain and waste reduction in a single supply chain. The present research deals with the nullification of food-waste produced in the supply chain. The model consists of two-stage supply chain running parallelly. The primary chain relates to the linear model (produce, use, and discard), and the secondary chain collects those food-wastes generated in the primary chain, and recycles them into food products for livestock. The secondary chain consumer completely utilizes those recycled products, resulting in the nullification of waste. The demand for each player in the primary chain remains the same. The deterioration of finished items is lifetime dependent and only applicable to the primary chain finished product. Both the supplier and the manufacturer follow a single-setup-multiple-delivery policy for shipment. The deteriorated items are sent to the secondary chain manufacturer in lots for lot policy by the primary chain retailers. The circular economy concept is established as waste is circulated through a new supply chain and is consumed completely in the final stage. A global optimum solution for the model is obtained using an algebraic procedure. The cost reduction is performed to demonstrate the effectiveness of this model. A sensitivity analysis of the parameters establishes the validity of the model and effectiveness in reducing carbon emission and the total cost of two-stage supply chain. Suggestions for the application of this model are discussed in the form of managerial insights.