Closed-loop Supply Chain Model Research Articles

Environmentally responsible closed-loop supply chain models for joint environmental responsibility investment, recycling and pricing decisions

With the gradual improvement of international treaties, fulfilling corporate environmental responsibility (CER) has evolved into an important strategy for the survival and development of firms. Effectively integrating environmental responsibility into supply chain management has gradually become the focus of scholars and practitioners in light of international competitive challenges. Under the Stackelberg game setting, this study develops quantitative models of two-echelon environmentally responsible closed-loop supply chains (CLSCs) to investigate joint environmental responsibility investment, pricing and collection rate decisions. Considering that demand is sensitive to price and environmental investment, the optimal decisions under the centralized and decentralized scenarios are determined. The analysis shows that corporate environmental responsibility investment is directly proportional to the collection rate and retail price. To identify the best reverse channel structure of environmentally responsible CLSCs, this study proposes three possible decentralized reverse channels, manufacturer-led collection, retailer-led collection and third-party-led collection. The findings reveal that the recycling strategy of third-party-led collection is disadvantageous, and the comparison between manufacturer-led collection and retailer-led collection is determined by transfer price. More precisely, if the transfer price exceeds the average collection profits per used product, the reverse channel structure that the retailer leading is optimal, and otherwise, manufacturer involvement in collection is optimal. Revenue sharing contract through bargaining is an effective coordination scheme to resolve channel conflicts, which shows that the split of surplus profits depends on the negotiation powers of channel members. In addition, this study also shows that retailer-led collection is optimal in the special case that the collection target is imposed by take-back legislations. This study merges corporate environmentally responsible, closed-loop supply chains, and channel coordination strands and contributes to the burgeoning field of environmentally responsible closed-loop supply chains.

Providing an Integrated Multi-Objective Model for Closed-Loop Supply Chain under Fuzzy Conditions with Upgral Approach

This study was conducted aimed at providing a sustainable multi-objective model of supply chain location, inventory, routing under uncertainty with a passive defense approach, in which Upgral model was first introduced to world. The Upgral Paradigm is an integrated model for location-inventory-routing problem in a four-level supply chain where parameters such as demand, facility cost and inventory costs are taken into account uncertain as triangular fuzzy numbers (TFNs). In this study, characteristics and capabilities of passive defense in supply chain, such as logistical flow rate, backup path security, the possibility of resource and equipment deployment, and dispersion principle were considered for location to increase resilience of supply chain. The model was solved using Whale Optimization Algorithm (WOA) and NSGA-II meta-heuristic algorithm. First, a four-objective mathematical model was proposed for problem objectives of which were: 1) minimizing supply chain costs; 2) maximizing social responsibility or social benefits; 3) minimizing environmental impacts; and 4) minimizing risk. Moreover, experimental sample problems were solved in three small, medium, and large groups using WOA Algorithm. The results of solving this algorithm were compared with results of NSGA-II one according to indices including quality, dispersion, uniformity and solution time indices to prove efficiency of algorithm. Based on results, WOA algorithm had a higher ability to achieve higher quality and near-optimal solutions than NSGA-II algorithm in all cases. The dispersion index values indicated that WOA Algorithm performed better in exploring and extracting feasible region. In addition, with respect to results of uniformity and solution time indices, it was found that NSGA-II Algorithm had a lower solution time than WOA Algorithm and answer space more uniformly.

A human disease transmission inspired dynamic model for closed-loop supply chain management

Given economic and environmental benefits, closed-loop supply chain (CLSC) has been attracting the attention of scholars and governments around the world. Considering dynamic changes and long-term development, this paper first constructs a dynamic CLSC model inspired by disease transmission model from the perspective of supply chain system. Then, considering the characteristics of product quantities over time, the performance and the total profits of the system in different situations are analyzed. Finally, a numerical study is carried out to analyze the operation condition of the dynamic system, by which some additional conclusions are made.

A bi-objective multi-period closed-loop supply chain network under uncertain demand

Due to the competitive environment, supply chain management is an important subject in the world of economy. It affects all of the activities including products manufacturing, flow between facilities and costs. In this research, a mixed-integer linear programming model is considered which included supplier, plants, demand markets, collection centres, and disposal centre. The closed-loop supply chain model is bi-objective. So, it is solved by the e-constraint method and non-dominated sorting genetic algorithm-II. In order to improve the meta-heuristic algorithm's efficiency, its parameters are tuned by Taguchi method. Afterward, the different dimensions of the model are considered and the problem is rewritten as a single-objective model and solved by LINGO software and the genetic algorithm using MATLAB software to compare the efficiency of the LINGO and meta-heuristic algorithm. In small-scale problems, solving by LINGO software and in large-scale problems, solving by meta-heuristic algorithms are more efficient.

A closed-loop supply chain model with rework, waste disposal, and carbon emissions

This paper develops a closed-loop supply chain model consisting of a single manufacturer, single retailer, and single collector under various coordination scenarios. New products produced from the manufacturing and remanufacturing processes will be sold to the market at the same price. Used products collected by the collector are sorted so that products categorized as recoverable will be sold to the manufacturer. There are two recovery processes considered in this paper, namely remanufacturing and refurbishing. Used products below the minimum acceptable quality level of the manufacturer will be categorized as waste and will be disposed of. We assume that the manufacturing process is imperfect as it produces reworkable defective products. A carbon cap-and-trade policy and investment in green technologies are applied in order to restrict the carbon emissions generated by the production stage of the system. The demand at the market place depends on the green technology level, the quality of the product, and the selling price. The proposed model is constructed under five different scenarios – centralized, decentralized, and three Stackelberg games led, respectively, by the manufacturer, retailer, and collector. A numerical example is provided to illustrate and compare the proposed model under each scenario and investigate the sensitivity of some of the model parameters on the optimal solutions. The results show that the centralized scenario performs better in maximizing the total profit compared to the decentralized one. However, the retailer-led Stackelberg model tends to give more equitable profit to all players when the selling price is set at the lower level as this will attract more demand.

A bi-objective multi-period closed-loop supply chain network under uncertain demand

Due to the competitive environment, supply chain management is an important subject in the world of economy. It affects all of the activities including products manufacturing, flow between facilities and costs. In this research, a mixed-integer linear programming model is considered which included supplier, plants, demand markets, collection centres, and disposal centre. The closed-loop supply chain model is bi-objective. So, it is solved by the e-constraint method and non-dominated sorting genetic algorithm-II. In order to improve the meta-heuristic algorithm's efficiency, its parameters are tuned by Taguchi method. Afterward, the different dimensions of the model are considered and the problem is rewritten as a single-objective model and solved by LINGO software and the genetic algorithm using MATLAB software to compare the efficiency of the LINGO and meta-heuristic algorithm. In small-scale problems, solving by LINGO software and in large-scale problems, solving by meta-heuristic algorithms are more efficient.

A fuzzy approach to multi-objective mixed integer linear programming model for multi-echelon closed-loop supply chain with multi-product multi-time-period

By the green point of view, supply chain management (SCM), which contains supplier and location selection, production, distribution, and inventory decisions, is an important subject being examined in recent years by both practitioners and academicians. In this paper, the closed-loop supply chain (CLSC) network that can be mutually agreed by meeting at the level of common satisfaction of conflicting objectives is designed. We construct a multi-objective mixed-integer linear programming (MOMILP) model that allows decision-makers to more effectively manage firms’ closed-loop green supply chain (SC). An ecological perspective is brought by carrying out the recycling, remanufacturing and destruction to SCM in our proposed model. Maximize the rating of the regions in which they are located, minimize total cost and carbon footprint are considered as the objectives of the model. By constructing our model, the focus of customer satisfaction is met, as well as the production, location of facilities and order allocation are decided, and we also carry out the inventory control of warehouses. In our multi-product multi-component multi-time-period model, the solution is obtained with a fuzzy approach by using the min operator of Zimmermann. To illustrate the model, we provide a practical case study, and an optimal result containing a preferable level of satisfaction to the decision-maker is obtained.

Stochastic closed-loop supply chain models: literature review, recent developments, and future research directions

Stochastic closed-loop supply chain models: literature review, recent developments, and future research directions

EPR system based on a reward and punishment mechanism: Producer-led product recycling channels

The discussion level of green development is constantly and exponentially growing, and the extended producer responsibility (EPR) system has become an important choice for the sustainable development of enterprises. To effectively manage the recycling of waste goods, this study uses the evolutionary game model to analyse the effectiveness of the reward and punishment mechanism for the implementation of the EPR system and builds a producer-led reverse closed-loop supply chain model under effective conditions. Then, we compare and analyse the channel selection of producers in carrying out the reverse supply chain under the different mechanisms of rewards and punishments. The findings are as follows. (1) The choice of producers regarding the implementation of the EPR system is affected by the reward and punishment mechanism. (2) Through the comparison of different models of recycling channels, it is found that producer-led independent recycling channels have the highest efficiency. (3) The producer will choose either the entrusted distributor recycling channels or entrusted third-party recycling channels, according to the different rewards and punishments.

A review of factors affecting closed-loop supply chain models

Closed-loop supply chain (CLSC) as one of the important configurations of the circular economy (CE) has received considerable attention in sustainability matters. It is composed of characteristics that, when identified, studied, and categorized, help not only to a better understanding of the current contributions in the literature but also lead to formulating new models. This research presents one of the first in-depth studies to investigate factors influencing CLSCs. It concerns the investigation of the models which are designed based on the game theory (GT). Therefore, the reviewed works focused on cooperation and competition among the game participants. A systematic literature review is implemented as a four-step process consisting of material collection, a descriptive analysis, category selection, and evaluation stage to review and discuss the works that focus on CLSC and use GT simultaneously. A content-based analysis is carried for the final works, which include 215 papers. The identified characteristics of these papers are classified into 12 main categories. Moreover, they are divided into subcategories to highlight the contribution of each paper. Accordingly, results are derived, and gaps are explained.

Closed-loop supply chain models with product remanufacturing under random demand

This study addresses the problem of choosing the appropriate closed-loop supply chain structure for the collection of used products from customers under random demand. We consider a two-echelon supply chain with three decision-making structures: (1) the manufacturer who coordinates with the retailer to obtain optimal channel profit, (2) the manufacturer who collects used products directly from customers, and (3) the retailer who collects used products from customers and the manufacturer who pays a transfer price to reacquire the products. We show that a unique optimal solution exists when the collection cost function satisfies the specified conditions under different models. We also identify differences among the three models and provide managerial guidelines for various marketing environments and collection cost functions. Surprisingly, contrary to previous studies, we find that the collection rate is not always largest under a centrally coordinated system compared with other making structures. As a special case, we investigate the effect of the coefficient of collection effort cost when cost structure is given.

Eco Friendly Closed Loop Supply Chain Model Under Fuzzy Conditions

Profits of a business organization can be sustained in the long term when the organization focus on environmental benefits and customer satisfaction along with company’s financial benefit. Customer satisfaction index (CSI) can be increased with minimization of the product delivery time and maximization of the quality. Reduction of carbon emission during product manufacture/remanufacture process contributes to the environmental benefit of the organization. The proposed model is a multi-objective, multi-stage, multi-product eco- friendly closed loop supply chain linear programming problem with four objective functions and various constraints under fuzzy environment. A sub model is formulated as an application to an automobile dealership company in Visakhapatnam, India and an experimental study is done using actual data from the company. Profit margin on sale and service of three types (Type P1, P2and P3) of new cars and sale of two types (Type A and B) of old cars are calculated. From the result analysis we can conclude that increase in the sale of new cars of type P1 and old cars of type A increases the profit margin of the company.

Decision-Making and Performance Analysis of Closed-Loop Supply Chain under Different Recycling Modes and Channel Power Structures

The recycling and remanufacturing of e-waste is linked to a worldwide emphasis on the establishment and implementation of Extended Producer Responsibility system (ERP), which has become an important problem in the process of cycling economy. Meanwhile, with the development and expansion of large-scale retail enterprises, the power structure of supply chain channels is showing a tendency towards diversity as well. However, few studies on closed-loop supply chains (CLSC) have considered both recycling modes and channel power structures. We aim to explore the influence of different recycling modes and channel power structures on the optimal decisions and performance of a closed-loop supply chain (CLSC), considering three recycling channels including manufacturer recycling, retailer recycling and hybrid recycling of retailer and manufacturer and two dominant modes including manufacturer-led and retailer-led. We construct six closed-loop supply chain models under different combinations of three recycling channels and two dominant modes. We analyze the effect of different recycling channels on company decision-making under the same dominant mode, whether participating in recycling has an impact on company decision-making under different dominant modes, and the effect on supply chain members and supply chain system under different dominant modes and recycling channels. The results show that the hybrid recycling strategy is always optimal for both supply chain members; the sub-optimal recycling strategies are both recycled by the subordinate enterprise, and the worst recycling strategies are both recycled by the leading enterprise. Moreover, it is always the worst strategy for manufacturer to participate in a closed-loop supply chain dominated by retailer and recycled by retailer; participating in a closed-loop supply chain dominated by manufacturer and recycled by manufacturer is always the worst strategy for retailer. From a system point of view, system efficiency is the highest under hybrid recycling, and system efficiency is the lowest if leading company recycles separately.

Recycling decision, fairness concern and coordination mechanism in EC-CLSC

Taking the e-commerce platform’s fairness concern into account, three decision-making models of e-commerce closed-loop supply chain are constructed. Then, the recycling decisions under three models are studied and the impact of fairness concern is analysed. The ‘effort costs sharing contract’ is proposed to realise the coordination of the supply chain. Finally, the conclusions are verified by numerical analysis. The results show that the e-commerce platform’s fairness concern reduces own profit and the remanufacturer’s profit, and decreases system efficiency. The ‘effort costs sharing contract’ can realise the centralised model where recycling price of waste products is the highest, commission is the lowest, and system profit is the highest. In the coordinated system, the higher the proportion of remanufacturer sharing effort costs, the higher the profit of remanufacturer.

Carbon tax or cap-and-trade: Which is more viable for Chinese remanufacturing industry?

Abstract The debate between cap-and-trade and carbon tax, two major carbon emission reduction mechanisms to deal with global warming, has been going on for years unsettled. The strategy to implement one of them or both is by far mainly addressed at the national level, and there is a need to customize the policy-making for different sectors, especially the emerging remanufacturing industry that has the great potential to reduce material and energy consumptions. Based on a closed-loop supply chain model, this study analyzes the tradeoffs between carbon tax and cap-and-trade with a series of numerical studies. While keeping carbon emissions under control, cap-and-trade demonstrates a better fit to remanufacturing: its performances on manufacturer profit, social welfare, and consumer surplus surpass carbon tax’ in nine, eight, and six out of nine groups respectively. Only when the carbon quota level is too high, the cap-and-trade is possible to lose. In addition, this study examines two government-to-enterprise-subsidy strategies, direct subsidy and policy bias, and find both helpful but almost no difference in their impacts. The findings yield useful insights into the industry-wise design of carbon emission reduction mechanisms for remanufacturing and similar sectors.

A Green Closed-Loop Supply Chain Coordination Mechanism Based on Third-Party Recycling

Taking an environment-friendly green closed-loop supply chain as the research object, this work established a two-stage closed-loop supply chain game model. Considering the influence of the environmental protection input on the whole supply chain, there are different decisions among the participants in the supply chain, and the different choices will have impacts on the benefits of the whole supply chain when manufacturers select a closed-loop supply chain model of third-party recycling. Hence, this work compared and analyzed the impact of centralized decision-making and decentralized decision-making on the returns and pricing strategies of each participant. Finally, an optimized cooperative mechanism decision model considering a cost profit sharing contract was further designed. The model is conducive to obtaining the maximum profit value in centralized decision-making and avoids the negative impact of a “double marginal effect” on supply chain income in decentralized decision-making, and finally, improves the overall coordination and profit of a green closed-loop supply chain. The numerical examples are conducted to verify the effectiveness and practicality of the proposed models. This work provides a helpful decision support and guidance for enterprises and the government on the used products recycling decisions to better manage the green closed-loop supply chain.

Addressing a set of meta-heuristics to solve a multi-objective model for closed-loop citrus supply chain considering CO2 emissions

Abstract Nowadays, the agricultural supply chain as one of the key fields of food production is considered which has recently attracted much attention from researchers. This paper focuses on optimizing a closed-loop citrus supply chain. To this end, a multi-objective mathematical model is formulated that it attempts to minimize total costs, to maximize demands' responsiveness, and to minimize CO2 emissions as environmental damages. To solve the proposed model, five meta-heuristic algorithms include a multi-objective version of the recently published algorithm called tree growth algorithm (MOTGA) and four well-known algorithms called NSGA-II, NRGA, MOKA, and MOSA are utilized. It should be noted that these algorithms are tuned using the Taguchi method to achieve better performance and these are validated using the e-constraint method in small size examples. It shows that the e-constraint cannot solve the large size problems and it implies the NP-hardness of the problem. Moreover, the MOTGA is selected as the best approach with the least distance from the ideal point. Finally, to more measurement, a sensitivity analysis is performed and the results confirmed the efficiency of the proposed algorithms. Based on the results, it is shown that multiple transportation vehicles can reduce CO2 emissions and improved all objective functions’ values. In addition, considering multiple vehicles improved responsiveness by about 14%. So, considering two new assumptions include CO2 emissions and multiple vehicles in this model, can lead to improve demand responsiveness and emissions reductions.

Strategies and stability study for a triopoly game considering product recovery based on closed-loop supply chain

This paper is focused on a triopoly closed-loop supply chain (CLSC) game model, including triopoly oligopolies applying for circular economy development. In the CLSC model, manufacturers sell new products and re-collect waste products for maximizing their profits. This paper analyzes the game processing, the Nash equilibrium solutions, and the stability of the game model. Moreover, the influences of parameters on the system’s stability have been investigated, using the maximal Lyapunov exponent, bifurcation graph, and the stable domain. The results show that the system will be unstable when the adjustment speed of the manufacture is too high; unreasonable price strategies could easily cause system bifurcation; the critical point of system bifurcation is closely related to the collecting price.

Multi-leadership in Closed Loop Supply Chain Based on Dual-channel

With the implementation of the Expanded Production Responsibility Framework (EPR) and the lack of resources, people turned their attention to the closed-loop supply chain (CLSC) as a solution. In the practical application of the closed-loop supply chain, companies have adopted a dual-channel sales model for online direct sales and offline retail sales. Based on the actual situation, this paper establishes three Stackelberg leader CLSC models with three-echelon, based on the dual-channel models. These models includes manufacturer-led dual-channel CLSC, retailer-led dual-channel CLSC, collector-led dual-channel CLSC and centralized CLSC. This paper is aimed to find out the optimal solution on each various Stackelberg leading models. Unlike expectations, collector-led dual-channel CLSC is not so good as other models, it even can’t lead to high collection effort. The customers’ preference to online supply chain increases in certain range, which can make excellent performance of total dual-channel supply chain. In addition, too much preference of online sales in manufacturer-led dual-channel can lead to only existence of online sales.

Joint Inventory and Pricing Policy for an Online to Offline Closed-Loop Supply Chain Model with Random Defective Rate and Returnable Transport Items

Environmental deterioration is one of the current hot topics of the business world. To cope with the negative environmental impacts of corporate activities, researchers introduced the concept of closed-loop supply chain (CLSC) management and remanufacturing. This paper studies joint inventory and pricing decisions in a multi-echelon CLSC model that considers online to offline (O2O) business strategy. An imperfect production process is examined with a random defective rate that follows a probability distribution. The results show that the O2O channel increases the profit of the system. For the defective rate, three different distributions are considered and three examples are solved. The results of the three examples conclude that the highest profit is generated when the defective rate follows a uniform distribution. Furthermore, based on the salvage value of defective items, two cases were studied. Results and sensitivity analysis show that the increase in defective rate does not reduce total profit in every situation, as perceived by the existing literature. Sensitivity analysis and numerical examples are given to show robustness of the model and draw important managerial insights.