Modeling Closed Loop Supply Chain Systems

Abstract

In the past, many companies were concerned with managing activities primarily along the traditional supply chain to optimize operational processes and thereby economic benefits, without considering new economic or environmental opportunities in relation to the reverse supply chain and the use of used or reclaimed products. In contrast, companies are now showing increased interest in reverse logistics and closed loop supply chains (CLSCs) and their economic benefits and environmental impacts. In this chapter, our focus is the study of remanufacturing activity, which is one of the main recovery methods applied to closed loop supply chains. Specifically, the authors investigate and evaluate strategies for effective management of inventory control and production planning of a remanufacturing system. To pursue this objective, they model a production and inventory system for remanufacturing using the System Dynamics (SD) simulation modeling approach. The authors primary interest is in the returns process of such a system. Case studies will be referred to in this chapter to support some of the findings and to further validate the developed model.