Closed Product Life Cycle as a Basis of the Circular Economy

Abstract

Objective – The circular economy aims to preserve the value of products and materials within a closed supply chain. The existing models and decision-making methods for managing the end of the product life cycle are mostly focused on the economic aspects. While the circular economy is aimed at combining environmental, economic and social goals. This article aims to develop a model for enterprise decision-making on the disposal of used products, taking into account socio-environmental and economic factors. Methodology/Technique – The article analyzes the impact of digital technologies on the formation of closed supply chains and the development of a circular economy. At the same time, special attention is focused on the model of a closed product life cycle, as a fundamental element in the formation of a circular economy at the micro and nano levels, as well as the importance of using digital technologies at all stages of the product life cycle. Findings –The methods of product management at the end of the life cycle studied in the article have made it possible to form a simulation decision support model regarding the method of product disposal, taking into account environmental and economic feasibility. Novelty – This study identified the main trends in the development of closed supply chains under the influence of digital technologies in the context of a circular economy. Type of Paper: Review JEL Classification: F42, F43 Keywords: Circular Economy; Digital Technology; Decision-making Model; Closed-loop Supply Chains Reference to this paper should be made as follows: Vetrova, M; Ivanova, D. (2021). Closed Product Life Cycle as a Basis of the Circular Economy, Journal of Business and Economics Review, 5(4) 36–50. https://doi.org/10.35609/jber.2021.5.4(4)