Closed-loop Supply Chain Model Research Articles

A Fuzzy Control Model for Restraint of Bullwhip Effect in Uncertain Closed-Loop Supply Chain With Hybrid Recycling Channels

By considering the uncertainties in the closed-loop supply chain system with hybrid recycling channels, a fuzzy control model is constructed to restrain the bullwhip effect. Firstly, the basic models of the uncertain closed-loop supply chain with hybrid recycling channels are established where the manufacturer and the third party recovery provider collect the recycled products at the same time. Then, the basic models of the closed-loop supply chain are converted into a nonlinear fuzzy switching model based on the discrete Takagi–Sugeno (T–S) fuzzy control system. Secondly, a fuzzy robust control method is utilized to reduce the impacts caused by the internal and external uncertain factors on the closed-loop supply chain. This method can not only restrain the bullwhip effect, but also make supply chain remain robust stability. Finally, the simulation results show the feasibility and effectiveness of the constructed fuzzy control system.

A Network Design Model for a Resilient Closed-loop Supply Chain with Lateral Transshipment

This paper develops a model for the closed-loop supply chain network design with disruption risk. By considering supply disruption, two factors including extra inventory and lateral transshipment are used as resilience strategies. The main purpose is to reduce the supply chain costs due to the location decisions, quantity of products between different levels and lost sale. Disruption in a supply is assumed completely by different scenarios, and then the problem is formulated by a mixed-integer programming model. Furthermore, a two-stage stochastic approach is implemented to tackle uncertainty. Finally, a sensitivity analysis is carried out to examine the effects of the resilience strategies on the structure of the supply chain and to propose some managerial insight for using the model in real world situations.

Lot sizing decisions in a closed-loop supply chain system with remanufacturing

We propose a closed-loop supply chain model consisting of a supplier, a manufacturer and a retailer under deterministic demand and quality dependent return rate. The manufacturer performs all of the operations regarding used/returned item management, including collection, inspection, sorting, recovery, and also waste disposal. The retailer's demand is fulfilled either by newly manufactured items or by remanufactured items. Two recovery processes are considered in the model, which are remanufacturing and refurbishing. The recoverable items which cannot be recovered as-good-as-new-one will be classified as refurbishable items and then sold to the secondary market at a lower price. We use multiple remanufacturing cycle and multiple production cycle policy to develop the proposed model. An iterative procedure is proposed to determine the optimal solutions. A numerical example is then presented for illustrative purpose and a sensitivity analysis is performed to show the effects of the changes in key parameters on the model's behaviour. The results from sensitivity analysis show that the optimal value of each decision variables is influenced by the demand and raw material buying price, while the joint profit is influenced by the demand, customer purchasing price, and the regular production cost.

Multi-echelon closed-loop supply chain network design and configuration under supply risks and logistics risks

Present day supply chains are dynamically expanding with the increase in globalisation but susceptible towards a number of risks too. The risks cause disturbances in supply chain and hinder the movement of products across their stage which ultimately leads to overall increases in supply chain costs. In this paper, a multi-echelon closed-loop supply chain model is considered, where supplier's quality risks (production issues), logistics risks (transportation issues) are mathematically modelled using mixed integer linear programming (MILP) formulation. The paper highlights benefits of adopting the supply chain network design under risk. The comparison of risk and no risk situation is illustrated for a generic closed-loop supply chain network. The findings suggest that risk consideration in supply chain network design is very useful, and its cost is not much higher to the organisation too. The supply chain resilience can be achieved with a moderate risk premium. The firms which can pay 10-13% more will be able to sustain in risk events and their network configuration will be robust under supply and logistics risks happenings.

Lot sizing decisions in a closed-loop supply chain system with remanufacturing

We propose a closed-loop supply chain model consisting of a supplier, a manufacturer and a retailer under deterministic demand and quality dependent return rate. The manufacturer performs all of the operations regarding used/returned item management, including collection, inspection, sorting, recovery, and also waste disposal. The retailer's demand is fulfilled either by newly manufactured items or by remanufactured items. Two recovery processes are considered in the model, which are remanufacturing and refurbishing. The recoverable items which cannot be recovered as-good-as-new-one will be classified as refurbishable items and then sold to the secondary market at a lower price. We use multiple remanufacturing cycle and multiple production cycle policy to develop the proposed model. An iterative procedure is proposed to determine the optimal solutions. A numerical example is then presented for illustrative purpose and a sensitivity analysis is performed to show the effects of the changes in key parameters on the model's behaviour. The results from sensitivity analysis show that the optimal value of each decision variables is influenced by the demand and raw material buying price, while the joint profit is influenced by the demand, customer purchasing price, and the regular production cost.

Multi-echelon closed-loop supply chain network design and configuration under supply risks and logistics risks

Present day supply chains are dynamically expanding with the increase in globalisation but susceptible towards a number of risks too. The risks cause disturbances in supply chain and hinder the movement of products across their stage which ultimately leads to overall increases in supply chain costs. In this paper, a multi-echelon closed-loop supply chain model is considered, where supplier's quality risks (production issues), logistics risks (transportation issues) are mathematically modelled using mixed integer linear programming (MILP) formulation. The paper highlights benefits of adopting the supply chain network design under risk. The comparison of risk and no risk situation is illustrated for a generic closed-loop supply chain network. The findings suggest that risk consideration in supply chain network design is very useful, and its cost is not much higher to the organisation too. The supply chain resilience can be achieved with a moderate risk premium. The firms which can pay 10-13% more will be able to sustain in risk events and their network configuration will be robust under supply and logistics risks happenings.

A memetic algorithm with extended random path encoding for a closed-loop supply chain model with flexible delivery

Logistics network design is a major strategic issue in supply chain management of both forward and reverse flow, which industrial players are forced but not equipped to handle. To avoid sub-optimal solution derived by separated design, we consider an integrated forward reverse logistics network design, which is enriched by using a complete delivery graph. We formulate the cyclic seven-stage logistics network problem as a NP hard mixed integer linear programming model. To find the near optimal solution, we apply a memetic algorithm with a neighborhood search mechanism and a novel chromosome representation including two segments. The power of extended random path-based direct encoding method is shown by a comparison to commercial package in terms of both quality of solution and computational time. We show that the proposed algorithm is able to efficiently find a good solution for the flexible integrated logistics network.

Closed-loop supply chain models with product take-back and hybrid remanufacturing under technology licensing

The economical and environmental benefits of remanufacturing have been widely recognized in literature and practical life. In this paper, we consider a closed-loop supply chain consisting of a manufacturer, a distributor and a third party, who are engaged in producing remanufactured products. Additionally, the manufacturer as the channel leader tends to cooperate with the distributor and the third party by technology licensing. Specifically, we develop three hybrid remanufacturing models: (1) the manufacturer collects and remanufactures used products by herself (Model M), (2) the manufacturer remanufactures a fraction of used products and licenses the distributor to remanufacture while the distributor collects used products (Model MD), (3) the manufacturer remanufactures a fraction of used products and licenses the third party to remanufacture while the third party collects used products (Model MT). We discuss the impacts of remanufacturing ability on the chain members and environmental sustainability, and also analyze the role of saving unit cost in the remanufacturing process. Moreover, we apply the Stackelberg game to attain the equilibrium strategies from the perspective of chain members' profits. The profit of the manufacturer, the distributor and the third party reaches the most in Model M, Model MD and Model MT, respectively. These results can help achieve an optimal approach of hybrid remanufacturing in a closed-loop supply chain.

폐쇄루프 공급망 모델을 이용한 혼합형유전알고리즘 접근법

폐쇄루프 공급망 모델을 이용한 혼합형유전알고리즘 접근법

Dual recycling channel decision in retailer oriented closed-loop supply chain for construction machinery remanufacturing

This paper targets on the optimum strategies of the collection decision for a retailer oriented closed-loop supply chain with dual recycling channel in the construction machinery industry. In the forward channel of this system, the manufacturer produces the new products, the retailer is contracted to remanufacture the used ones, and then sells both the new ones and remanufactured ones to the customers. In the reverse channel, the retailer and the third party collector simultaneously collect the used products. Based on several valid assumptions, we propose a special closed-loop supply chain model with dual recycling channel within the framework of game theory, and explore how the remanufacturer should properly allocate the collection efforts to the retailer and the third party. Furthermore, we conduct performance analysis to investigate the optimal strategies for the supply chain members. Our research confirms that the remanufacturer can gain more used product returns and profits with dual recycling channel, and the optimal allocation of the collection efforts to the retailer and the third party is determined by the relationship of the reverse logistics cost coefficients.

A proactive model in sustainable food supply chain: Insight from a case study

Recently more and more companies are adopting proactive sustainable strategies and developing sustainable supply chain management practices. Researchers identify Closed-Loop Supply Chain (CLSC) models as one of the major contributors to realising sustainable operations. Such models typically use flows concerning the products only as the unit of analysis.This paper intends to provide a basis for developing new CLSC models, extending them to recovery resources from general outputs (e.g. unavoidable waste) with no value in terms of products. The new models affect also the configuration of the CLSC, with different set of resource suppliers and logistics providers.The case study analysed in this paper derives from the food sector, in which the waste produced is reused as a resource, avoiding the disposal of different materials through resource-recovery activities that allow waste to be returned to the main supply chain as valuable inputs to configure a new supply chain.The principal objective of this study is to create a new sustainable model of CLSC using and recovering waste from meat processing. A profitability indicator, an energy self-sufficiency one and a qualitative assessment of social implications are introduced to evaluate global sustainability opportunities for activating new loops.

Joint pricing of new and refurbished items: A comparison of closed-loop supply chain models

This study aims to provide a clear understanding of the interaction between forward and reverse processes in a closed-loop supply chain based on a comprehensive model, which determines the sales prices of new and refurbished items, incorporating the channel conflict issues between the first and second markets. A three-echelon supply chain consisting of a manufacturer, a seller, and a refurbisher is examined. Then, we introduce five models with different supply chain structures considering possible combinations of processes. The comparison among five models reveals that the supply chain structure can differentiate not only the sales prices of new and refurbished items but also the overall performances. Specifically, the manufacturer's integration of the selling process induces the lowest sales price of a new item, and the sales price of a refurbished item is highest when a third-party refurbisher handles the refurbished item. The first-market sales are maximized when the manufacturer directly sells the new item, while second-market sales are maximized when the seller deals with both new and refurbished items. The combination of supply chain processes also plays an important role in enhancing the profit of each supply chain player and overall supply chain.

Carbon emissions and energy effects on a two-level manufacturer-retailer closed-loop supply chain model with remanufacturing subject to different coordination mechanisms

This paper presents two models (classical and VMI-CS coordination) for a two-level closed-loop supply chain with a manufacturer and a retailer with a facility to remanufacture used items. The paper considers three critical environmental issues, which are the energy used in production (manufacturing and remanufacturing) processes, GHG emissions from production and transportation activities (subject to a penalty tax), and the number of times to remanufacture (recover) a used item. Numerical results show that the traditional optimization approach, which minimises the sum of inventory related costs, suggested less remanufacturing, fewer recovery times and more GHG emissions and energy usage; a result of operating at high production rates. The VMI-CS model was shown to be more economical than the classical model for a wide range of manufacturing rates, but not necessarily a more environmentally responsible choice. An extensive numerical analysis was conducted to enrich the discussion and to draw some managerial insights on how to make environmentally conscious decisions.

Trade-in and save: A two-period closed-loop supply chain game with price and technology dependent returns

Consumers evaluate the convenience of changing their products according to the price paid as well as the technology (quality) level. When the consumers wish to capitalize the products residual value, they should return them as early as possible. Accordingly, we develop a model of Closed-loop Supply Chain (CLSC) where consumers seek to gain as much as possible from their returns and the return rate is a function of both price and quality. We model a two-period Stackelberg game to capture the dynamic aspects of a CLSC, where the manufacturer is the channel leader. We investigate who, namely, manufacturer or retailer, should collect the products in the market. Thus, we identify the best CLSC structure to adopt when the return rate is both price- and quality-dependent. Our results demonstrate that it is always worthwhile for companies to collect products and adopt an active return approach for returns. We investigate the effect of retail competition in both forward and backward channels and show the impact of eliminating the double marginalization on market outcomes.

Design and planning of a closed-loop supply chain with three way recovery and buy-back offer

Due to strict environmental legislations and competitive economics worldwide, closed-loop supply chain (CLSC) management has been receiving increasing attention. In order to improve the return rate of used products, in this paper, a recovery framework is proposed by employing buy-back offer at retailer level. The proposed recovery framework is integrated with an optimization model for a multi-period CLSC under demand and capacity uncertainty to determine optimal buy-back price that needs to be offered to consumers so that the minimum collection limit set by the legislators is fulfilled as well as overall cost of the integrated system is minimized. The developed model addresses the possibility of three way recovery options, namely; product remanufacturing, component remanufacturing, and raw material recovery to determine the optimal manufacturing, remanufacturing and recycling quantity. Sensitivity analysis suggests that there is a trade-off between the extra benefit generated through remanufacturing and the cost of acquisition of used products due to the employment of buy-back offer. A condition for the buy-back offer to be simultaneously advantageous for both manufacturer and retailer under revenue sharing contract is derived. A comparative study is also undertaken to examine the performance of the CLSC when collection is made through buy-back offer vs. third-party collection. The proposed CLSC model is further extended by adding a separate demand for remanufactured products and the performance of the initial model with the extended model is compared.

Multi-objective fuzzy mathematical modelling of closed-loop supply chain considering economical and environmental factors

The growing concern for sustainability has forced the researchers and managers to incorporate the environmental and social factors along with the economical factors in the design of supply chains. This paper presents the design and optimization of a multi-objective closed-loop supply chain considering the economical and environmental factors with uncertainty in parameters. The proposed network is modeled as fuzzy multi-objective mixed integer linear programming problem considering multi-customer zones, multi-collection centers, multi-disassembly centers, multi-refurbishing centers, multi-external suppliers, and different product recovery processes; to take care for purchasing cost, transportation cost, processing cost, set-up cost, and capacity constraints simultaneously. The model is solved using an interactive $$\upvarepsilon $$ -constraint method. A case example is solved using LINGO 14.0 to demonstrate the significance and applicability of the developed fuzzy optimization model for closed-loop supply chain.

A Decentralized Model for Allied Closed-Loop Supply Chains: Comparative Analysis of Interactive Fuzzy Programming Approaches

The supply chain network design problem addresses various factors that maximize customers’ demand and minimizes the sum of strategic, tactical, and operational costs. Companies with common activities in their supply chains have started to cooperate with each other to achieve better service levels. Based on this initiative, a multi-level mixed-integer linear programming model is developed that includes two allied supply chains with different decision makers (DM) at two different decision-making levels. The primary aim of this study is to design an allied closed-loop supply chain (CLSC) network that uses some of the same facilities. The secondary aim of this study is to examine this allied CLSC model simultaneously and analyse the impact of the DMs’ objectives based on satisfaction degrees. Various interactive fuzzy programming (IFP) approaches were utilized to examine the presented multi-level CLSC model. A novel IFP approach which is based on the fuzzy analytic hierarchy process (AHP) is proposed. The effectiveness of the proposed IFP approach on the CLSC model is investigated with hypothetical data. The computational results show that the proposed approach obtains higher satisfaction degrees for upper-level DMs than the other approaches.

Closed loop supply chain networks: Designs for energy and time value efficiency

Product recovery has become a viable option for many industries to realize economic gains while protecting the environment. However, insufficient investment and inefficient supply chains have hampered the viability of reuse and/or recycling because of the extended time intervals between the recycling process of recovery and reuse. Manufacturers and distributors face the challenge and necessity to reduce these process delays in order to recover the maximum value of the returned products through an effective, responsive closed loop supply chain (CLSC). This paper quantitatively measures the effective responsiveness of the CLSC model in terms of time and energy efficiency. The proposed multi-objective mixed integer linear programming (MOMILP) model evaluates delay parameters with decision variables that maximize profit, optimize customer surplus and minimize energy use. The model suggests decision makers may achieve an optimal tradeoff among differing objectives in a multiple-objective CLSC scenario. We employed a multi-objective particle swarm optimization (MOPSO) approach to solve the proposed MOMILP model and compared our approach with the Non-Dominated Sorted Genetic Algorithm (NSGA-II) for optimal solution. Results of the comparative evolutionary approaches shows that MOPSO outperforms NSGA-II in almost all cases in achieving the best trade-off solutions. Sensitivity analysis carried out to test the robustness of the model confirms that substantially less cost is feasible through the reduction of return process delays. This paper aims to formulate a multi-objective CLSC problem based on a network-flow model measuring the time value to recover maximum assets lost due to delay at different stages of the recycle process. We also developed a particle swarm approach for a multi-objective CLSC. Our study also offers valuable insights for designers wishing to create a product flow network with an optimal capacity level in case of prioritized objectives scenarios.

Modeling and random path-based direct encoding for a closed loop supply chain model with flexible delivery paths

Abstract Due to business and environmental issues, industrial players are under a pressure to take back the product after its use. Moreover, the significance of transportation cost and customer satisfaction spurs an interest to develop a flexible network design model. This paper proposes an integrated logistics network model with three kinds of delivering paths. Minimizing the total costs reveals a mixed integer linear program. As a solution methodology for the proposed NP hard problem, memetic algorithm is considered with a neighborhood search mechanism and a novelty in chromosome representation as one of the major issues can affect the performance of memetic algorithm.

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.