Closed-loop Supply Chain Model Research Articles

Optimal Decisions in an Authorized Remanufacturing Closed-Loop Supply Chain under Dual-Fairness Concerns

This paper studies optimal decisions in an authorized remanufacturing closed-loop supply chain (CLSC) consisting of a manufacturer, a retailer, and an authorized third-party remanufacturer with dual-fairness concerns (distributional fairness concerns and peer-induced fairness concerns). Four Stackelberg game models were developed: (i) the dual-fairness concerns are considered by a retailer (model F); (ii) the retailer does not consider both types of fairness concerns (model N); (iii) the retailer only considers the distributional fairness concerns (model D); (iv) the retailer only considers the peer-induced fairness concerns (model P). We use numerical analysis to examine the equilibrium outcomes under dual-fairness concerns. The results show that: (1) The increase in the coefficient of peer-induced fairness concerns will result in more profit for the manufacturer in most cases, while distributional fairness concerns always hurt the manufacturer; (2) In most parameter cases, the increase in the degree of distributional fairness concerns favors the retailer. The retailer considers only peer-induced fairness concerns when the degree of distributional fairness concerns is low and the degree of peer-induced fairness concerns is relatively high, whereas in other cases, two kinds of fairness concerns are ignored; (3) Model P is the most profitable and model D is most disadvantageous for the third party, however, for the manufacturer it is the opposite; (4) The impact of fairness concerns on the environment depends on the retailer’s attitude towards fairness concerns. Model P is better for the environment, while model D has the highest environmental impact. This study introduces dual-fairness concerns into the authorized remanufacturing CLSC model and provides theoretical references for authorized remanufacturing and sustainability practices.

Hybrid closed-loop supply chain with different collection competition in reverse channel

In the hybrid closed-loop supply chain (CLSC) with diverse collectors, customers increasingly prioritize the convenience in returning end-of-life (EOL) products. This trend necessitates supply chain entities to enhance their collection service to address the intensifying competition for EOL products collection. To devise appropriate convenience and pricing strategies, we construct a hybrid game-theoretic CLSC model encompassing a manufacturer, a retailer, and a third-party collector, and we propose new collection functions that cater to varying levels of collection competition, spanning monopoly, duopoly, and hybrid competitive scenarios. Furthermore, we delve into the influence of customers' preferences or distrust towards a specific collector on the collection competition, which is caused by factors such as more convenient offline stores or unqualified recycling process. Our study first reveals that collection competition is affected by all collectors' convenience strategies, while the total collection rate is dominated by the most preferred collectors' convenience strategy. Second, both customer's preference and distrust negatively affect pricing and convenience strategies, albeit with differing effects on collection rates across various competition levels. Notably, channel distrust exerts a more substantial influence on manufacturers' and third-party collectors' strategies. Third, we also examine how competitive collection and customer behavior shape the proportion of collected products destined for different recovery options, i.e., remanufacturing and recycling, as well as the overall efficiency of recovering collected products across the entire supply chain. And channel preference plays a more positive role in enhancing the overall collection rate for the supply chain.

Investigating the effect of circularity index on a closed loop supply chain with multi-shipment policy

Environmental sustainability has emerged as a crucial aspect for every business, as the wastage of used products greatly contributes to greenhouse gas emissions and environmental hazards. Adopting the circular economy concept is essential to address this problem. This approach prioritizes reliability and re-manufacturability, aiming to simultaneously reduce waste and enhance sustainability and profitability. In this context, the proposed model introduces a sustainable closed-loop supply chain model wherein the manufacturer oversees the production process and delivers requested batches to the retailer under the single order and multi-shipment policy. The model incorporates the notion of circularity, quantified by a circularity index representing the degree to which the product's circularity level. The level of product circularity can be enhanced by material choice, supplier selection, and innovative design while manufacturing. The model being presented aims to maximize the total integrated profit of the closed-loop supply chain system by optimizing the number of shipments as well as the circularity index. It is evident from the analysis that the circularity index significantly influences profits and environmental sustainability by increasing product demand and extending product life cycles. Notably, the numerical example provided in the model illustrates that accounting for the effects of the circularity index results in an optimal profit up to 5% higher compared to scenarios where such effects are not considered.

An integrated planning approach for perishable goods with stochastic lifespan: Production, inventory, and routing

This paper focuses on addressing the crucial challenges posed by the uncertainty surrounding perishable goods within the supply chain. With staggering socioeconomic costs and significant environmental implications, effective management of perishable goods emerges as a critical imperative. Globally, the annual loss of approximately 14% of food, amounting to a staggering USD 1 trillion, highlights the urgency of the issue. However, Prevailing classification methods for perishable products oversimplify their complexity by dividing them into fixed or variable lifespans, neglecting the random lifespans endured due to fluctuating storage conditions, blurring traditional boundaries between fixed and variable classifications. In response to these pressing challenges, the research proposes a novel approach: the development of a nonlinear mixed-integer programming model for a green closed-loop supply chain. This innovative model seamlessly integrates production, inventory, and routing decisions for both main and secondary products of a manufacturer. Moreover, it optimizes order splitting and transportation modes to efficiently convert perished items into raw materials under conditions of uncertainty. Central to the approach is the adoption of a scenario-based methodology to model uncertainties, particularly focusing on the variability in the lifespan of perishable products. This approach allows for a more nuanced understanding of the complex dynamics inherent in managing perishable goods within the supply chain. To solve the proposed model, a novel hybrid algorithm is introduced: the Particle Swarm Optimization (PSO) and Simulated Annealing (SA) algorithm, or PSOSA, ensuring robust optimization under uncertainty and enhancing decision-making within the perishable goods supply chain. The research findings underscore the inadequacy of prevailing assumptions regarding the fixed lifespan of perishable products, commonly observed in the literature. By accounting for uncertainty in perishable goods’ lifespan, a more accurate representation of total producer costs is achieved, highlighting the misleading reduction of 25% observed when neglecting such uncertainty.

Creating a sustainable closed-loop supply chain: An incentive-based contract with third-party E-waste collector

This paper proposes a closed-loop supply chain model to study the impact of product returns and awareness program on e-waste supply chain. The study focuses on the sustainability aspects of e-waste management and the effects such initiatives bring about to the environment at large. Reusing and recycling of collected products in manufacturing will improve the supply of scarce resources and reduce reliance on virgin raw materials. Engaging in CLSC can enhance brand reputation and competitiveness through sustainability while reducing the health risks to informal recycling workers by formalizing practices. The proposed model consists of a manufacturer, retailer, and third-party collector (TPC) under wholesale price and incentive contracts with deterministic demand. From the analysis it is observed that integrating a third-party collector with higher recycling rate boosts the total profit of the decentralized setting with a TPC. The centralized model, with a single decision maker, results in lower retail prices and higher collection rates compared to the decentralized models thereby commanding a higher overall profit.

Recycling, pricing decisions, and coordination in the dual-channel closed-loop supply chain: A dynamic perspective

As the “Internet+” mode promotes transforming and upgrading the traditional recycling industry, dual-channel recycling has become the focus of commercial activities. Based on such background, this paper constructs the differential game models of the dual-channel closed-loop supply chain (DCCLSC) system in the complete non-cooperation (DN), incomplete cooperation (D), and complete cooperation (C) scenarios by applying game theory. The novelty is that recycling and pricing decision problems are investigated for the DCCLSC system from a dynamic perspective. A cost sharing-transfer payment contract is designed to realize the perfect coordination of the DCCLSC system. Moreover, the extended models with government intervention and inventory management are proposed. Finally, the numerical examples are used to verify the feasibility and validity of the addressed results. The results show that 1) online retail price is higher than offline retail price when μ>μN; 2) The retail price in the DN model is always lower than the D model, and their comparative relationship with the C model is closely related to the ratio of recoverability rate; 3) The recoverability rate and the profit of DCCLSC system are highest in the C model; 4) Competition and government intervention can create a win-win situation with improving environmental and economic benefits.

Closed-loop Supply Chain Model Analysis of Home Appliances based on Promotional Effort and Recycling Effort

Nowadays, a large number of home appliances have entered the node of renewal, if they can be properly disposed of and utilised, used home appliances can also be converted into renewable resources to achieve the economic cycle, and at the same time, green living and circular economy are increasingly accepted by the public. Recycling of used home appliances has both economic and social benefits. At the same time, promotional efforts invested in the market for home appliances have an obvious effect on increasing their market demand. Therefore, it is necessary to study the closed-loop supply chain of home appliances based on promotion and recycling efforts. In this paper, we use literature analysis, mathematical analysis and Stackelberg game analysis to construct a closed-loop supply chain model for home appliances based on promotional and recycling efforts after determining who is the promoter among manufacturers and retailers, and then compare and analyse the decisions and benefits of the supply chain members, taking into account their centralised and decentralised decision-making. The results of this paper show that: (1) when home appliance manufacturers, retailers and third-party recyclers of used home appliances make decentralised decisions, there is a double marginal effect, i.e., the supply chain members only consider their own benefits while ignoring the benefits of the supply chain as a whole, which results in the failure of this closed-loop supply chain system of home appliances to be coordinated. (2) When the retailer's promotional effort is greater, both the retail price and the retailer's profit are lower. (3) The greater the recycling effort of the third-party recycler of used home appliance products, the higher its recycling price, i.e., the consequent increase in recycling costs, leading to a decrease in its profit.

Optimizing City-Scale Demolition Waste Supply Chain Under Different Carbon Policies.

In order to establish a green, low-carbon circular development economic system, imperative goals include achieving carbon peaking and carbon neutrality. This research delves into the resource utilization of city-scale demolition waste (C&DW), aligning with environmental protection needs and sustainable development principles. The paper introduces a unique closed-loop supply chain (CLSC) model tailored for C&DW and employs a distinctive mixed integer nonlinear programming (MINLP) model for optimization. Guangzhou serves as a case study for thorough analysis, verification, and practical application of the proposed model, especially under diverse scenarios of carbon price (CP) and carbon trading (CT) policies. The key conclusions drawn from this study include the following: (1) The cost of carbon emissions is intricately influenced by both carbon emissions and carbon price, with the latter effectively regulating the carbon emissions during C&DW recycling. (2) The implementation of a CT policy, with a fixed carbon price, contributes to a further reduction in the cost of C&DW recycling treatment. (3) Under equivalent conditions, the CT policy demonstrates the potential to decrease costs and enhance the economic benefits within the building environmental protection product market. The research outcomes not only contribute to the advancement of management theory in the C&DW recycling supply chain (SC) but also provide a robust theoretical foundation for governmental initiatives aimed at introducing effective C&DW recycling management policies.

Is it practical to uphold both resilience and sustainability of supply chains using closed-loop supply chain models considering circular economy? An empirical investigation from Kenya

Is it practical to uphold both resilience and sustainability of supply chains using closed-loop supply chain models considering circular economy? An empirical investigation from Kenya

Manufacturer’s cooperation strategies of closed-loop supply chain considering recycling advertising

Online recycling shows great potential to significantly boost recoverable quantity and attract advertising investment. This study focuses on exploring how retail and recycling advertising affects the manufacturer’s cooperation strategy in a closed-loop supply chain (CLSC). The CLSC model consisting of a manufacturer, an online recycling platform with recycling advertising, and a retailer with retail advertising considers four cooperation strategies by a manufacturer: no cooperation, cooperation with only the retailer, cooperation with only the online recycling platform, and cooperation with the online recycling platform and the retailer. After comparing four strategies, it is found that the manufacturer collaborates with the retailer, or the online recycling platform based on retail and recycling advertising coefficients. Furthermore, cooperation between the manufacturer and the retailer increases retail advertising and sales, which incentivizes the manufacturer to collaborate with the retailer. Collaboration between the manufacturer and the online recycling platform will increase both recycling advertising and quantity, which incentivizes the manufacturer to collaborate with the online recycling platform. These results would encourage more manufacturers to improve their operational efficiency through cooperation with online recycling platforms because the online recycling platforms conveniently utilize recycling advertising to increase the quantity of used products recycled, which in turn contributes to environmental sustainability.

A multi-period multi-objective closed-loop blood supply chain configuration and optimisation under disruption

The COVID-19 pandemic has highlighted the stability of the blood supply chain in case of interruption and other emergencies. Blood is a precious and perishable substance, and any disruption in its supply can cause serious consequences. Current research on the blood supply chain mostly focuses on a multi-objective perspective, and rarely involves both multi-objective and multi-period methods simultaneously. Therefore, we develop a multi-period multi-objective closed-loop blood supply chain model that considers disruptions and uncertainties of demand and recovery, aiming at achieving a balance among various objectives, and coordination of various periods. Fuzzy chance-constraint, meta-heuristic approaches and exact solution (CLPEX) are adopted to mitigate the impact of uncertainties and calculate the optimal solution of a calculating case. The calculation outcomes indicate that: With regard to economic costs and social benefit, the multi-period system is better than the single-period system; the comprehensive performance of the multi-target system is better than that of the single-target system; and the multi-period multi-objective system is more in line with the real situation. Meanwhile, the mitigation strategies, such as maintaining emergency inventory and implementing lateral transshipment, can significantly enhance the performance of the system in disruptions. This paper mainly contributes the follows: Firstly, it provides a reference for configuration and optimisation of a cross-region closed-loop supply chain under disruptions and uncertainties. Secondly, the comprehensive trade-off of multi-objective and multi-period in this paper is especially suitable for perishable production with short cycles, large fluctuations of supply and demand.

Does blockchain technology need to be introduced in the closed-loop supply chain based on product lifecycle management?

Resource wastage, prevalent in all industries, hinders sustainable economic and social development. Inspired by the application of blockchain technology in product traceability, we find that government investment in blockchain technology platforms (BTP) can facilitate the recycling of waste products. We develop a closed-loop supply chain (CLSC) model consisting of a single manufacturer and a single retailer, examining the impact of BTP on the CLSC and its potential benefits to the government. The results show that BTP increases retail prices and market demand within the CLSC but has a non-monotonic impact on wholesale prices. Interestingly, we find that even when the BTP unit cost is moderate, BTP can still enhance CLSC profits if the recycling rate falls below a certain threshold. Furthermore, in scenarios with a high service elasticity coefficient, CLSC can leverage BTP to boost profits, even when the unit usage cost is substantial. Under specific conditions, timely investments in BTP can augment social welfare for the government. Notably, government investment in BTP becomes imperative when the recycling rate is relatively low, and the environmental burden is significant. Finally, this paper explores the conditions conducive to collaborative implementation of BTP by the government and CLSC, providing a valuable reference for their effective BTP implementation.

Decision making in fuzzy closed loop dual channel supply chain

This paper discusses the optimal pricing and collecting decisions in a fuzzy environment of the three closed-loop dual-channel supply chain models where a manufacturer produces the original product from fresh materials and unfashionable products. The manufacturer sells the original products to the customers using direct and retail channels (forward dual channel). In the reverse channel, the manufacturer, third-party collector and retailer individually take responsibility for unfashionable products acquired from the market in the three models. Remanufacturing cost, product collecting cost and market demand are treated as fuzzy variables. The optimal decisions wholesale price, direct price, retail price and collection rate are derived using fuzzy set theory and game theory approach in the three decision models. Finally, numerical illustrations clarify the impact of the fuzzy degree parameters on the decision variables and the expected profits of the players. It is found that the manufacturer decision model is superior for receiving the maximum expected profits of the players and also being more convenient from the customer?s perspective.

Pricing Decisions for Power Battery Closed-Loop Supply Chains with Low-Carbon Input by Echelon Utilization Enterprises

Today, with the number of waste power batteries and consumers’ awareness of low-carbon both increasing, a new closed-loop supply chain model in which the node enterprises of reverse supply chains are being constructed. These are responsible for the recycling, echelon utilization and low-carbon innovation of waste power batteries. This provides a new way for the development of reverse supply chain node enterprises and lays a theoretical foundation. In this paper, we use the backward solution method to solve the Nash equilibrium solution of the Stackelberg game. Through numerical calculation and simulation, the decision variables, profit and income of the supply chain are analyzed and the equilibrium results are compared. The experimental results indicate that the implementation of low-carbon innovative production by cascaded utilization enterprises is conducive to the growth of their profits with lower cost inputs. The impact of the initial waste power battery recycling rate on the decision variables is negative, while, for the supply chain as a whole, the profit growth of the node companies can be positive and the location of the inflection point appears to be particularly important. The sensitivity coefficient of low-carbonization levels has a positive regulatory effect on decision variables and location of all parties. The closed-loop supply chain model proposed in this study promotes the overall development of a power battery closed-loop supply chain, and also provides theoretical guidance for reasonable pricing decisions of node enterprises under the new model. Based on the results of this paper, the government can implement incentives such as subsidies, or formulate reasonable policies for the development of a power battery closed-loop supply chain.

Competition or cooperation? Exploring the impact of dominant modes on the competitive relationship in CLSC

PurposeThe paper proposes a two-level closed-loop supply chain (CLSC) dynamic competitive model based on different competitive cooperation situations, and explores the impact of competitive cooperation methods on the pricing strategies, recycling and remanufacturing strategies and competitive model selection strategies of supply chain firms.Design/methodology/approachThis paper establishes a CLSC game consisting of a manufacturer and two retailers. Firstly, five CLSC models are established in both horizontal and vertical dimensions, each of which competes with one another. Secondly, the recycling and remanufacturing pricing strategies are analyzed under different competition or cooperation models. Finally, the results are verified through numerical analysis.FindingsThe overall profitability of the CLSC is highest when the manufacturer–retailer partnership alliance is in place. The relationship between retailers and manufacturers is also found to be the best way to achieve overall optimization of the CLSC.Originality/valueThe paper investigates the relationship between the competitive partnership and the total profit of the CLSC, taking into account how to optimize the overall benefit, and focusing on how to optimize the individual interests of each participating enterprise. The results can provide basis and guidance for managers' pricing decision and competition cooperation.

Green consideration in a closed-loop supply chain model with imperfect inspection under learning impact

This study investigates a multi-echelon closed-loop supply chain model integrating learning impact with a single producer, single retailer, and single collector. Retail pricing, green innovation, and marketing efforts are assumed to have a linear relationship with end-user demand. The return of rejected goods occurs at random and is subject to an imperfect inspection procedure that is vulnerable to two different types of classification error. An S-shaped learning curve is considered to soothe the inspection process which is subject to inaccuracy. Numerical examples are used to illustrate the implications of the suggested model in order to achieve a goal that benefits both the consignor and the consignee. It is investigated whether the learning effect can outweigh the loss even when the inspection error has a detrimental effect on supply chain earnings. To identify the crucial parameters that can spark some truly exceptional managerial ideas, a sensitivity analysis is carried out.

A Spatial Equilibrium Problem for the European Pulp and Paper Industry Under the Emission Trading System

We propose a spatial equilibrium problem for a pulp and paper supply chain network under the Emission Trading System (ETS) and the circular economy principles. The developed closed-loop supply chain model, based on the variational inequality theory, accounts for the forest deployment and the production of paper using both virgin pulp and recyclable paper waste in an area that is subject to the ETS. In addition, it considers the exchanges of virgin pulp, paper, recyclable and not-recyclable paper waste between this regulated area and geographical zones where no environmental policies apply. The aim of this paper is to investigate the ETS impacts on the pulp and paper industries located in an environmentally regulated area in terms of operating costs, production and trading volumes of the aforementioned commodities, and emissions generated. The case study focuses on the European pulp and paper companies, which are among the energy-intensive industries deemed to be exposed to the carbon leakage risk as a consequence of the ETS application. Sensitivity analyses on the carbon price value and on the trade flexibility are conducted. Our results show that the ETS implies additional costs for the European pulp and paper companies and induces them to resort more on imports of virgin pulp and paper from not-regulated zones.

Analysis of Green Closed-Loop Supply Chain Efficiency under Generalized Stochastic Petri Nets

In this paper, we aim to explore the operational performance of a green closed-loop supply chain under random events. A green closed-loop supply chain model based on generalized stochastic Petri nets (GSPN) is built using the Petri nets theory. According to the isomorphic relationship between GSPN and continuous-time Markov chains, the relevant Markov model is converted from GSPN, and the steady-state probability of the model is then calculated. Finally, the model is analyzed from the aspects of time performance and operation efficiency of each link. Compared to previous studies, this paper finds that: when the whole green closed-loop supply chain system reaches a dynamic equilibrium state, the product has a steady-state probability at all stages, and thus the overall operational performance of the system can be obtained; compared with the recycling of waste products, the green product takes a longer time in the production and distribution stages; since marketing, packaging processing, market feedback, and market demand formulation account for a high level of utilization throughout the life cycle of green products, decision makers need to focus on the supervision and management of these links. Managers of green closed-loop supply chain systems need to adjust their decision-making strategies in a timely manner according to the performance level of the system in the steady state to realize the efficient operation of the system. This paper not only provides theoretical support for the improvement of the operational efficiency of green closed-loop supply chain system, but also provides new ideas for the research of green closed-loop supply chain operation mode.

Pricing and Coordinating the Lease-Oriented Closed-Loop Supply Chain for Construction Machinery in the Era of Carbon Tax

Promoting sustainable production and consumption practices in the construction machinery industry is crucial for achieving energy savings and reducing carbon emissions. However, there is a lack of targeted studies addressing the challenge of scaling up leasing and recycling while maximizing economic benefits for enterprises. To fill this gap, this paper presents a lease-oriented closed-loop supply chain model that incorporates a carbon tax policy to investigate the impact of the carbon tax rate and consumer preferences for remanufactured products on the supply chain and introduces a leasing compensation–cost apportioning combined contract to achieve supply chain coordination in the construction machinery sector. The model considers differential selling and leasing prices for new and remanufactured products, as well as the recovery rate, under both centralized and decentralized decision-making approaches. The study explores the interrelationships between various parameters through sensitivity analysis and numerical simulation. The results demonstrate that within a certain range of the cost apportioning proportional coefficient and leasing compensation proportional coefficient, the combined contract can lead the supply chain to achieve Pareto optimality. As the carbon tax rate increases, it was observed that the profits for all parties in the supply chain tend to decrease. However, due to the increased demand for remanufactured products, the product recovery rate improves, resulting in a reduction in total carbon emissions in the closed-loop supply chain of construction machinery. Moreover, the profits of all parties and the total supply chain profits initially decrease and then increase with an increasing preference coefficient for remanufactured products among consumers. By leveraging these factors and adopting effective strategies, such as enhancing consumer recognition of remanufactured products and optimizing pricing and cost allocation, it is indeed possible for the profits of all parties and the total profits in the supply chain to surpass the initial values, even in the face of increasing carbon tax rates. This demonstrates the potential for aligning sustainability objectives with economic benefits in the construction machinery industry.

Pricing and quality improvement strategies in a closed-loop supply chain with dual collection channel

This paper presents two-period closed-loop supply chain (CLSC) models considering demand with and without replacement sales. A manufacturer produces a new product using raw materials in the first period, and the manufacturer and a third party compete to collect used products in the second period. Further, the manufacturer produces an improved version of the new product using raw materials and returned-used products in the second period. The product is sold through a retailer in both periods. We propose a two-period Stackelberg game with the manufacturer as a leader to investigate the product’s pricing strategy and quality improvement level. It is shown that the quality improvement level improves with an increase in the sensitivity of return to the competitor’s acquisition price but deteriorates with an increase in sensitivity of return to the collector’s acquisition price. Finally, we implement a cross-shareholding coordination mechanism and observe an improvement in the quality level and profits of the manufacturer and the retailer.