Forward Supply Chain Research Articles

The Government’s Environment Policy Index Impact on Recycler Behavior in Electronic Products Closed-Loop Supply Chain

We establish the model of multilevel closed-loop supply chain (CLSC) which included raw material supplier, manufacturer, distributor, retailer, and third-party recycler based on system dynamics (SD). Considering factors which influence recycler behavior-environmental policy index and recovery delay, we apply SD software—Vensim—to simulate CLSC model and study recycler behavior’s influence on the entire CLSC through calculating the bullwhip effect of all levels members order rate. Research shows that (1) the larger the environmental policy index, the greater the recycle proportion and the better the effect of weakening retailer’s order rate in forward supply chain, which however, increasingly, strengthen the reverse supply chain bullwhip effect, (2) the shorter the recovery delay, the better the effect of weakening the forward supply chain bullwhip effect and the longer the recovery delay, which increasingly weakens the reverse supply chain bullwhip effect, and (3) the effect of environmental policy index on the bullwhip effect of all levels members order rate is more significant than recovery delay.

Performance analysis of inventory models, distribution and transportation networks in forward supply chain: a theoretical approach

Performance analysis of inventory models, distribution and transportation networks in forward supply chain: a theoretical approach

Design of forward supply chains: Impact of a carbon emissions-sensitive demand

We explore the impacts of a carbon emissions-sensitive demand on decisions relative to the design of forward supply chains (facility location, supplier selection, production technology selection and transportation mode selection). We investigate the design of a forward SC where a set of input items (components) are purchased from a network of external suppliers and used to manufacture a finished product in one or multiple production facilities to fulfill the demand of one or multiple customers. The demand for the final product is an endogenous variable sensitive to carbon emissions per unit and it is also assumed to increase with a decrease in the per unit carbon emissions of the product. We consider the case of a single customer and extend the model to multiple customers. Based on numerical experiments conducted on a case study from the textile industry, we use the models to provide a series of insights that might be instrumental to firms and policy makers. For instance, results indicate that customers׳ environmental awareness may encourage companies to bring the area of production close to the area of consumption and to select local suppliers. It might even be optimal to dedicate a production facility to each customer in spite of the incurred additional costs. However, if the customers are very demanding (in terms of reducing carbon emissions) then the best strategy can be to design a supply chain with relatively high emissions level because satisfying customer requirements may be very expensive in this case. Furthermore, if the customers are willing to pay a higher price for the product then this can lead to reducing per unit emissions. Our results augment the research to the fields of design of forward and greener supply chains by modeling and experimenting an endogenous demand sensitive to carbon emissions.

Production-inventory model for two-echelon closed-loop supply chain with finite manufacturing and remanufacturing rates

ABSTRACTThis research develops a two-echelon closed-loop supply chain production-inventory model consisting of a manufacturer, a remanufacturer and a retailer. The retailer faces a constant demand from the customers, which is satisfied by new and remanufactured product received from the manufacturer and the remanufacturer, respectively. The manufacturer and remanufacturer produce the product in batches with finite production rate. The manufacturer procures raw material in batches from outside supplier, and the remanufacturer receives the used product from the customers at a constant return rate. Many studies in the area of forward supply chain have established that the centralised production-inventory control models provide better results than the decentralised models. Hence, with synchronised activities of the supply chain players, this research proposes to find an optimal production-inventory policy of the players by minimising the joint total cost of the two-echelon closed-loop supply chain. Numerical illustration is presented to demonstrate the solution procedure and a sensitivity analysis is carried out to examine the impact of key parameters of the problem. Also, the total cost of closed-loop supply chain model is compared with the total cost of the corresponding forward supply chain model.

Multi-objective fuzzy design of closed-loop supply chain network considering risks and environmental impact

ABSTRACTDue to governmental, environmental, and economic concerns, the closed-loop supply chain network has attracted the attention of researchers. In this article, a multiproduct, multi-echelon, and multi-objective closed-loop supply chain network model in a fuzzy environment is proposed. The forward supply chain network includes raw material suppliers, virgin material suppliers, plants, distribution centers, and customer zones, while the reverse supply chain network is composed of customer zones, collection centers, refurbishing centers, dismantling centers, and decomposition centers. The objectives of this model are to minimize the total cost, waste, carbon dioxide, and risks. In order to solve the proposed model, a fuzzy multi-objective optimization method is used. A numerical example validates and verifies the practicability of the fuzzy model and solution method, and demonstrates the proposed model and method can be applied to solve real world problems.

Dual channel closed-loop supply chain coordination with a reward-driven remanufacturing policy

This paper investigates a reward-driven policy, employed in a closed-loop supply chain (CLSC), for acquiring used products earmarked for remanufacture. Under the examined model, a single manufacturer sells products through a retailer as well as directly to end users in a forward supply chain. In the reverse supply chain, three different modes of collection are employed to capture used products for remanufacture: they are through a third party, directly by the manufacturer and from the retailer. Mathematical models for both non-cooperative and centralised scenarios are developed to characterise the pricing decisions and remanufacturing strategies that indicate individual and overall supply chain performance. Optimality of all the proposed models is examined with theory. To coordinate and achieve a win–win outcome for channel members, we proposed a three-way discount mechanism for the manufacturer. Extended numerical investigation provides insights on ways to manage an efficient reward-driven CLSC in a dual-channel environment.

Remanufacturing supply chain coordination under the stochastic remanufacturability rate and the random demand

As an effective mode for resource recovery, remanufacturing has been widely recognized in practice and academia. However, coordination is needed and multi-uncertainties exist in a remanufacturing supply chain (RSC). Under a retailer collection mode, this paper extends the existing studies on a revenue-sharing mechanism for a forward supply chain to examine how to coordinate a RSC between a remanufacturer and a retailer by developing a mathematical model. This model considers two types of uncertainties, they are, the stochastic remanufacturability rate from the supply side of used products and the random demand occurring in remarketing of remanufactured products. This study fills the research gap on RSC coordination under the multi-uncertainty environment. Moreover, it introduces an iterative algorithm (the Newton–Raphson Method) to deal with difficulty in solving the implicit function of the payment to consumers under the non-uniform demand distribution by finding the approximate value. The research results show that a revenue-sharing contract for a RSC with multi-uncertainties can increase profit for the whole RSC as well as the remanufacturer and the retailer by eliminating double marginalization. Besides, the government subsidy to the remanufacturer can motivate the retailer to collect more used products under a revenue-sharing case since the retailer can share benefits of the whole RSC. A case study of remanufactured truck engines demonstrates benefits of the proposed revenue-sharing mechanism and the profit increase for the whole RSC with the government subsidy.

Multi-period closed-loop supply chain network equilibrium with carbon emission constraints

One effective method to reduce industry's environmental footprint is the use of a closed-loop supply chain (CLSC). Based on the traditional forward supply chain, the CLSC incorporates collection and remanufacturing to reduce waste and satisfy environmental goals. In this study, we consider the CLSC network equilibrium, comprising manufacturers, retailers, demand markets and recyclers, in a multi-period planning horizon. In the scenario considered, all of the manufacturers make homogeneous products and have two types of mandatory carbon emission constraints during manufacturing/remanufacturing; one of which can be called a periodic carbon emission constraint, and the other, a global carbon emission constraint. Based on variational inequality and complement theory, the optimal behaviors and the equilibrium conditions of various players in the CLSC network are formulated, and the governing network equilibrium model is established. A modified projection and contraction algorithm is used to solve the model. The validity of the proposed model and the impact of the two types of carbon emission constraints on network equilibrium are demonstrated with numerical examples. The managerial insights obtained in this paper lead to areas of future research into CLSC networks.

Reverse supply chains: Effects of collection network and returns classification on profitability

Used products collected for value recovery are characterized by higher uncertainty regarding their quality condition compared to raw materials used in forward supply chains. Because of the need for timely information regarding their quality, a common business practice is to establish procedures for the classification of used products (returns), which is not always error-free. The existence of a multitude of sites where used products can be collected, further increases the complexity of reverse supply chain design and management. In this paper we formulate the objective function for a reverse supply chain with multiple collection sites and the possibility of returns sorting, assuming general distributions of demand and returns quality in a single-period context. We derive conditions for the determination of the optimal acquisition and remanufacturing lot-sizing decisions under alternative locations of the unreliable classification/sorting operation. We provide closed-form expressions for the selection of the optimal sorting location in the special case of identical collection sites and guidelines for tackling the decision-making problem in the general case. Furthermore, we examine analytically the effect of the cost and accuracy of the classification procedure on the profitability of the alternative supply chain configurations. Our analysis, which is accompanied by a brief numerical investigation, offers insights regarding the impact of yield variability, number of collection sites, and location and characteristics of the returns classification operation both on the acquisition decisions and on the profitability of the reverse supply chain.

Benders’ decomposition for concurrent redesign of forward and closed-loop supply chain network with demand and return uncertainties

This paper attempts to design a reverse supply chain network (SCN), add it to an existing multi-product forward SCN and simultaneously redesign the existing forward supply chain (SC). The problem considers uncertainty on products demand and and also returned products in multi-period context. Benders’ decomposition is applied to solve the stochastic mixed-integer model to optimality. The scenarios are generated based on the demand distribution function using Cholesky’s factorization method to consider correlation among different products’ demands. To decrease the computational effort, the number of scenarios is reduced using k-means clustering algorithm. The method is tested on a cell phone SC.

Coal Transportation Network Optimization Model Based on Power Source Distribution

Coal is the important fuel and industrial raw materials in my country, and it accounts for 70% of total energy production and consumption in our country, and power plants’ coal consumption accounts for more than half of national total coal consumption. The research of electric-coal supply chain related to coal production place, coal transit place and consumption place (power plant). Due to there are many nodes like these three kinds coal transportation in the market, so the project that integrates every nodes into unified transportation optimization network has the function of reducing coal consumption and saving transportation costs. The paper constructs coal transportation analysis model, electric-coal supply and transportation path dynamic optimization model based on electric-coal transportation network analysis, and make effective analysis for choosing electric-coal transportation path. The paper also puts forward electric-coal supply chain optimization measures from electric-coal supply chain integration and ports building.

Allocation of external returns of different quality grades to multiple stages of a closed loop supply chain

A single period multistage closed loop supply chain (CLSC) is presented here considering simultaneous manufacturing of new products and remanufacturing of customer returned used products. The quantity of used products in reverse supply chain considered in the model is a fraction of the new products manufactured in the forward supply chain. Used products of known quantity are pulled from end customers as per quality grades. Products are assumed to be mechanical in nature and remanufacturer has to pay different acquisition prices for different quality grades of return. The groups of graded products based on the acquisition prices are thus sorted and sent to stages of CLSC earmarked for them as per demand for repairing/recycling of raw materials. After repairing/refurbishing and recycling at each stage of reverse supply chain the used parts/products become part of forward supply chain. In this paper, a nonlinear maximizing profitability function for CLSC has been formulated for the system with a price dependent demand for n-stages. The decision variables are selling price of product and percentage return of graded used products entering into different stages. A numerical example for a three stage model illustrates the method followed by managerial insight.

Acquisition pricing and remanufacturing decisions in a closed-loop supply chain

This paper models a closed-loop supply chain (CLSC) with a manufacturer and its supply channels – recycle channel and reliable supply channel. We assume that the manufacturer may reuse the recycled main product component and remanufacture the product. The recycle channel shows stochastic recovery rate. Both the centralized (integrated) recycle channel CLSC and the decentralized recycle channel CLSC are studied. The optimal production decision and the optimal acquisition pricing decision are obtained for both the deterministic demand and the stochastic demand cases. Further, the paper discusses the supply chain inefficiency in this CLSC. It is shown that under decentralized recycle channel structure, the optimal acquisition price is always lower than the optimal acquisition price under centralized recycle channel structure, causing reduced recycle quantity and lower remanufactured quantity, which is similar to the effect of double marginalization in the normal forward supply chain. The cost difference between the two supply channels also increases such double marginalization impact. In order to reduce such supply chain inefficiency, two contracts (complete compensation and partial compensation) are proposed. It is shown that under certain conditions, both contracts are Pareto improving for the decentralized supply chain and can be used to coordinate the CLSC. Numerical examples are used to illustrate the results. The numerical examples show the different preferences of supply chain parties on different risk reductions in the decentralized system. In general, the interests on demand risk reduction is aligned between the recycle channel supplier and the manufacturer with the manufacturer showing higher motivation; on the other hand, recycle channel supplier and the manufacturer may have conflict of interests in supply risk reduction when the supply risk is low, and their interests are aligned when the supply risk is high.

A strategic framework for design and implementation of sustainable reverse supply chain with reference to consumer durables

Recalls, business returns, wrong deliveries, guarantees, repairs and renovation and end-of-life returns are some of the numerous cases of reverse logistics that organizations face. It has verifiably been an underestimated portion of supply chain. However organizations have understood about its effect on overall revenues, ecological environment and corporate social responsibility. The organizations that have been best with their reverse supply chains are those that firmly facilitate them with their forward supply chains, making a closed circle framework. The objective of this paper is to perform a study on reverse supply chain within the consumer durable industry and translate the outcomes into a reverse supply chain. It aims to find out the major trends, developments and challenges that reverse supply chain faces. It also focuses on how improvements in reverse supply chain can create substantial value for stakeholders.

Supply Chain Strategies for the Indian Automotive Sector

The Supply Chain Management has received a great interest during the last few years. There is a concurrent view that a ‘save all’ strategy applicable to all circumstances is available to industrialists. This paper challenges the view and puts forward supply chain strategies in the automotive sector. The effect of the global economic meltdown increased the pressure on automotive executives to make right decisions about their supply chain for better performance. In a highly challenging and competitive environment such as today, where supply chain is a popular tool for improving the organizational competitiveness, an efficient and effective supply chain strategy is a must for automotive manufacturers and their component manufacturers so as to meet the changing consumer demands. The paper explores the concept of supply chain strategies for the automobile industry as a possible strategy to respond to changing consumer demand. Each strategy is explained in depth and the study concludes with a design to match different alternatives with different customer requirements. Thus, a tool is provided for selecting the right supply chain strategy given any type of customer requirements.

Optimization of Recyclables Collection Processes

In the last decade environmental concerns, legislative measures and growing public awareness about the environmental consequences of waste disposal and extraction of natural resources have led to an increase in recycling and reuse efforts. However, both recycling and reuse require appropriate reverse logistics network structure, as well as adequate realization of logistics processes in such a network. The focus of this paper is to consider the problem of waste materials collection processes, which comprises pick-up recyclables from collection points and transferring them to a recycling facility. Because the recyclables value is relatively low, realization of reverse logistics processes, particularly those related to its collection, introduces the relatively high costs. On the other side, efficient and cost effective recycling in treatment facilities requires adequate supply with collected recyclables. Therefore, having in mind experience from forward supply chain management, and potentials of joint coordination of transportation and inventory decisions, this research introduces planning methodology to optimization of recyclable collection processes. That is, our intention is to propose modeling approach that simultaneously considers collection vehicles scheduling, and recyclables inventories optimization. Furthermore, as some of recyclables could be hazardous materials, risk minimizing criterion has been also considered.

Numerical Simulation of Forward Green Supply Chain

The forward green supply chain consisting of the manufacturer and retailer is as the background. The Game Theory is used,and two kinds of green supply chain game models are set up: the Centralized decision-making model, and the Manufacturer-leading Stackelberg game model.Then we carry out numerical simulation.We find that (1)With the increase of green level of green products, the market price of green product is increasing, the profit the manufacturer and the retailer are also increasing;(2)The manufacturer and the retailer will benefit from that consumers have strong environment consciousness.So we suggest the manufacturer and the retailer should cooperate to produce higher green level of products.

Reverse supply chain plan for remanufacturing commercial returns

The flow of commercial returns, products returned by customers for any reason within 90 days of sale, is a significant concern for many manufacturers. The total value of these returns is estimated at about $100 billion a year in the USA. In order to reduce their negative impacts on the environment and prevent high disposal costs, these returned products need to be properly handled, processed, and, if applicable, remanufactured, recycled, or reused. However, since the primary focus of most manufacturers is the forward supply chain, a large proportion of the returned products’ value is lost. Two key decision policies affecting the performance of such systems are the target quality for components used in the primary product and duration of the time returned products are accumulated before they are remanufactured. High targeted quality increases the production cost but cuts on product return rate. Long accumulation time, on the other hand, increases production lot sizes for remanufacturing that results lower remanufacturing costs per unit product. When there is a market for remanufactured products the tradeoff between profit from selling primary products and that of remanufactured units may justify targeting a lower than perfect quality and still maximize the total profit. And this could be achieved without negative effects on environment. In this work, a model for a forward/reverse supply chain is developed to satisfy a fixed demand with a combination of new and remanufactured products. The objective is to maximize the total profit as a function of two above decision factors. The application of the proposed model has been demonstrated by several numerical examples.

The Carbon Subsidy Analysis in Remanufacturing Closed-Loop Supply Chain

Carbon subsidy is an important measure for the government to encourage enterprises to reduce carbon emission. This paper analyzes the impact of carbon subsidy on remanufacturing closed-loop supply chain (RCLSC). We explore the profits and the carbon emission quantities of three types of a supply chain: forward supply chain, remanufacturing closed-loop supply chain, and RCLSC with the carbon subsidy. This paper also discusses when and how the government implements the policy of carbon subsidy to encourage an enterprises’ behavior of cutting carbon emission from the view of RCLSC. We provide the close form of the conditions under which the government should implement the carbon subsidy strategy and the carbon subsidy of government could increase the profits of agents of the supply chain and deduce the carbon emission of the whole supply chain simultaneously. It is found that the government should implement the carbon subsidy strategy only when the recycling price is within a certain range, and the carbon subsidy of government should be within a reasonable range.

A vendor–purchaser economic lot size problem with remanufacturing

In this paper, we study a closed-loop supply chain in which a single purchaser orders a particular product from a single vendor and sells it on the market. A certain fraction of used items return from the market back to the purchaser, who is responsible for collecting and returning them to the vendor. In addition to manufacturing new items, the vendor is able to remanufacture the returns into as-good-as-new items which are subsequently used to serve market demand. Our framework features the conventional joint economic lot size (JELS) model extended to include the return flow of the used items. In line with the assumptions of the JELS model, we assume a deterministic constant demand for the product. The fraction of used items returning from the market is assumed to depend on the purchaser’s collection effort. To stimulate the returns, the vendor may offer the purchaser a transfer payment per item returned. The questions addressed by this study pertain to the optimal centralised control of this closed-loop supply chain, to the individually optimal policies of its members, and to the coordination within this supply chain under a decentralised control. In particular, we show that the transfer payment alone cannot coordinate the supply chain under consideration and may even fail to do so when combined with a two-part tariff—which is otherwise known to coordinate the corresponding forward supply chain. Our numerical study, though, has revealed that the combined contract is capable of substantially reducing the coordination deficit. We also introduce a novel three-part tariff which is shown to enable supply chain coordination in combination with the transfer payment.