Closed-loop supply chain network designs considering RFID adoption

Abstract

This paper reports on a closed-loop supply chain network for the remanufacturing of products under RFID technology. RFID technology can be used in a closed-loop supply chain to improve the efficiency of ordering and the operation of a just-in-time remanufacturing system; however, this invariably incurs costs. Companies must carefully consider the opportunities and challenges posed by RFID technology to ensure that such an investment is worthwhile. This study contributes to the body of existing closed loop supply chain literature through formulating the problems as continuous functions to reduce the complexity of the problems and decrease the amount of data required which greatly facilitates development and implementation. The objective of this study was to determine the number of distribution centers, the number of remanufacturing centers, the joint replenishment cycle time, and the investment in RFID required to minimize total network costs. This paper applies a continuous approximation (CA) approach to model the network. Nonlinear programming techniques are developed to solve the optimization problems. The results of numerical analysis demonstrate that the adoption of RFID could be highly beneficial to companies. We also investigate the effects of parameter values on costs and decisions to gain managerial insight.