Closed-loop Supply Chain Model Research Articles

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.

Optimal production delivery policies for supplier and manufacturer in a constrained closed-loop supply chain for returnable transport packaging through metaheuristic approach

Recent advances in the product packaging materials have enabled the supply chain management systems to adopt returnable transport packaging policies to achieve economic and environmental sustainability. The application of the advanced self-healing polymers in packaging material has enabled the packaging to withstand fatigue associated failures with the increased mechanical strength. In this perspective, this paper develops a multi-attribute closed-loop supply chain model for self-healing polymers based returnable transport packaging with single supplier, single manufacturer, and multi-retailers under budget and storage constraints. A single-setup-multi-delivery (SSMD) policy is recommended for the centralized decision making of the supplier and manufacturer in a proposed supply chain management to improve the economic sustainability. To depict the real world situations for environmental protection, the effect of the variable aspects of transportation and carbon emissions are minimized through the optimal production delivery strategies. Multi-objectives of the proposed supply chain model include profit maximization and carbon emissions minimization of the system. A weighted goal programming technique along with three distinct metaheuristic approaches are applied to obtain the efficient trade-off among model objectives. The experimental analysis is carried out to illustrate the practical implication of the proposed supply chain management model and numerical results are analyzed for their robustness. The experimental outcomes for the application of SSMD policy are compared with single-setup-single-delivery (SSSD) policy, which proves that the SSMD policy improves the total profit of the whole system by devising the optimal number of shipments. The sensitivity analysis is carried out to study the behavior of the key parameters involved in the proposed supply chain management for varying decision maker preferences and significant managerial insights are obtained.

Novel model and kernel search heuristic for multi-period closed-loop food supply chain planning with returnable transport items

Closed-loop supply chain (CLSC) is of utmost importance to sustainable development and has received increasing attention in recent decades. However, food CLSC with returnable transport items (RTIs) has been rarely studied although its growing applications in practice. This paper aims to investigate a multi-period CLSC planning problem that coordinates the flows of perishable food products and RTIs considering food quality. The objective is to maximise the total profit of the holistic supply chain over a finite planning horizon. To this end, a novel mixed integer linear programming model is first formulated. As the problem is proven NP-hard, an improved kernel search-based heuristic is then developed. A real case study deriving from a food manufacturer in China shows the applicability of the proposed model and method. The results indicate that the manufacturer’s profit can be improved by more than 10% with our method. Numerical experiments on randomly generated instances demonstrate that the proposed heuristic can yield high-quality solutions with much less computation time compared with the commercial solver CPLEX and an existing heuristic.

Closed-loop supply chain models with product recovery and donation

Besides economic profits, environmental and social concerns are attracting more and more attention. In this paper, we introduce the environmental responsibility through the product recovery and the social responsibility through the product donation. On the premise that the manufacturer undertakes the product recycling, we consider three distinct donation subjects, viz, the centralized system's donation, the manufacturer's donation and the retailer's donation, and develop a manufacturer-retailer supply chain model to analyze the effect of the product recovery and the donation on the operations management. The results show the product donation under the subsidy incentive expands the demand for the product and increases the collection rate. In terms of two decentralized systems, the members who bear the responsibility of the product donation can obtain more profits. And that the manufacturer undertakes the product donation is a better choice from environmental and social perspectives. From the view of economic profit, that the retailer undertakes the product donation is a better choice only when the collection cost is high and the donation subsidy is low. All decisions in the centralized system are better than those in the other decentralized systems. Thus, we present a two-part tariff contract with bargaining and a retailer-led revenue sharing contract to coordinate two decentralized systems, respectively. The optimal bargaining factor and the revenue-sharing proportion are determined to verify that the two kinds of contracts are feasible.

Multi-objective multi-facility green manufacturing closed-loop supply chain under uncertain environment

PurposeToday’s, supply chain production and distribution of products to improve the customer satisfaction in the shortest possible time by paying the minimum cost, has become the most important challenge in global market. On the other hand, minimizing the total cost of the transportation and distribution is one of the critical items for companies. To handle this challenge, this paper aims to present a multi-objective multi-facility model of green closed-loop supply chain (GCLSC) under uncertain environment. In this model, the proposed GCLSC considers three classes in case of the leading chain and three classes in terms of the recursive chain. The objectives are to maximize the total profit of the GCLSC, satisfaction of demand, the satisfactions of the customers and getting to the proper cost of the consumers, distribution centers and recursive centers.Design/methodology/approachThen, this model is designed by considering several products under several periods regarding the recovery possibility of products. Finally, to evaluate the proposed model, several numerical examples are randomly designed and then solved using non-dominated sorting genetic algorithm and non-dominated ranking genetic algorithm. Then, they are ranked by TOPSIS along with analytical hierarchy process so-called analytic hierarchy process-technique for order of preference by similarity to ideal solution (AHP-TOPSIS).FindingsThe results indicated that non-dominated ranked genetic algorithm (NRGA) algorithm outperforms non-dominated sorting genetic algorithm (NSGA-II) algorithm in terms of computation times. However, in other metrics, any significant difference was not seen. At the end, to rank the algorithms, a multi-criterion decision technique was used. The obtained results of this method indicated that NSGA-II had better performance than ones obtained by NRGA.Originality/valueThis study is motivated by the need of integrating the leading supply chain and retrogressive supply chain. In short, the highlights of the differences of this research with the mentioned studies are as follows: developing multi-objective multi-facility model of fuzzy GCLSC under uncertain environment and integrating the leading supply chain and retrogressive supply chain.

A Study of Product Quality and Marketing Efforts in Closed-Loop Supply Chains With Remanufacturing

In this paper, the closed-loop supply chain (CLSC) models are extended to consider the case that the manufacturer can improve the product quality and the retailer can have effective marketing activities to promote the product. One centralized and three decentralized CLSC models are mathematically formulated in this paper. For the centralized CLSC model, the optimal solutions are derived in closed-form format analytically. For three decentralized CLSC models, by assuming the manufacturer is the leader, the equilibrium solutions are also obtained in closed-form format under the Stackelberg game settings. Based on the optimal/equilibrium solutions and the corresponding objective function values for the proposed models, several interesting managerial insights, and economic implications are obtained. Moreover, the proposed models with product quality improvement and marketing efforts are compared with the models with only product quality improvement effort and the models with only marketing effort. The results show that the performance of the proposed models with both product quality improvement and marketing efforts is better in the decentralized CLSC models.

Developing a multi-method simulation model of a green closed-loop supply chain and determining pricing and advertising policy against a competitor

The environmental impact of supply chains has motivated many studies in this area. This research proposes a novel multi-method simulation approach which combines agent-based and discrete event modelling approaches to model a green closed-loop supply chain and optimise it through an optimisation via simulation technique. A closed-loop supply chain is developed under the demand uncertainty to minimise total cost and total greenhouse gases (GHG) emissions and maximise management preference of the supply chain in the presence of a competitor. Taguchi design of experiments method is used to generate scenarios, then total cost and total GHG emissions are recorded through simulating the scenarios. Management preference is determined based on decision makers' opinion. Scenarios are ranked against three attributes with the proposed panel-group TOPSIS method. Inventory replenishment parameters, pricing and advertising policies, and transportation type are determined via solving the model. An automotive industry case is provided to demonstrate the model's capabilities.

Developing a multi-method simulation model of a green closed-loop supply chain and determining pricing and advertising policy against a competitor

Developing a multi-method simulation model of a green closed-loop supply chain and determining pricing and advertising policy against a competitor

A Review of Structural Relationships in Closed-Loop Supply Chain Model

The acquisition strategy of returned products has become essential in the study of reverse supply chain. There are three primary activities included in the process of a the reverse supply chain, the acquisition of returned products, the remanufacturing process, and redistribution. This literature review intends to study the existing relationship amongst supply chain players in a closed-loop supply chain (CLSC) model. In the remanufacturing process performed by the company, returned products must be collected from consumers. Therefore, remanufacturing companies rely upon consumers as cores suppliers. This makes the good relationship between the two become crucial in company operational sustainability successfully. In this study, the identified journal articles were categorized into types of structural relationships between supply chain players and network structures of a reverse supply chain. Types of structural relationships are ownership-based, service-contract, direct-order, deposit-based, credit-based, buy-back, and voluntary–based. There are four types of returned product collector and remanufacturer: Original Equipment Manufacturer (OEM), a third party (3PL), retailer, and remanufacturer. Discussion of the journal articles was presented in each category. After that, the structural relationship was explored to find its advantage and disadvantage, so that CLSC can be managed effectively and efficiently. As a summary, suggestions for future research were described as the result of the literature review conducted.

Product disposal penalty: Analysing carbon sensitive sustainable supply chains

The performance evaluation of sustainable supply chain considering economic, environment, and social performances is considered in this paper. We propose a mixed integer linear programming formulation for a closed loop supply chain (CLSC) which operates under carbon cap and trading, material recovery and reuse, and disposal penalty. Environmental sustainability considering carbon emission and the social sustainability considering reusability are the important features of the proposed model. In a forward supply chain (FSC), the recoverability and reusability aspects are absent. The integration of backward supply chain to FSC leads to total costs becoming higher; as a result the integration is not deliberated as a good alternative. Employing the proposed model, the effect of economic, environmental and social costs on both FSC and CLSC are analysed for a single period. We found that the CLSC is economical as well as sustainable if an appropriate level of penalty is imposed for not recovering the material for reuse. The sustainability of the supply chain depends on the collection of post consumed goods (PCG) from the customer zones and the subsequent recovery of materials. An index is proposed to reflect the sustainability of the supply chain. The penalty cost is an important aspect for implementing ‘extended producer responsibility’ (EPR). If organisations do not adhere to EPR scheme, government/controlling agency can levy a tax (penalty) to ensure collection of PCG for recycling and reuse. The proposed model helps to determine such a penalty cost. We also applied CLSC model to a real-life blood bag supply chain to validate its performance.

An uncertain model for integrated production-transportation closed-loop supply chain network with cost reliability

Reverse logistics has acquired a boost because of various government legislation and several environmental, economic and social reasons. Different optimization approaches are widely applied in reverse logistics problems so as to attain different goals. Efficient production and transportation of the items improve the overall performance of the closed-loop supply chain networks. In this paper, we develop a multi-echelon and multi-item integrated production-transportation closed loop supply chain model. The model includes raw material suppliers, hybrid facilities, customers, collection centres, and disposal centres. Three objective functions under consideration are the minimization of total cost, total defected items and total delivery time. To deal with real life uncertainties we adopted the reliability approach for cost parameters whereas supply and demand parameters are considered as uncertain variables. Cost reliability parameters, as well as uncertain constraints are converted into their crisp equivalent form using necessary approaches. Fuzzy goal programming is used to obtain a compromise solution to the proposed model. The proposed model is tested on a real-life case study and finally, the results and conclusions are discussed. This paper provides acumen for fomenting the decision making process in logistics problems.

Developing a closed-loop supply chain model with price and quality dependent demand and learning in production in a stochastic environment

In this paper, we develop a closed-loop supply chain model with two suppliers, one manufacturer and one retailer. The manufacturer produces a single product in batches using fresh raw materials and used items. Fresh raw materials can be obtained from primary and secondary suppliers. The primary supplier is cheaper but may not provide the exact ordered quantity, whereas the secondary supplier is expensive but always offers the exact ordered quantity. Random return of used product and stochastic lead time at the retailer are assumed in this model. The market demand of the finished product is linearly dependent on the retail price and quality, and the production process is subject to learning. A numerical example is taken to illustrate the developed model and perform sensitivity analysis. It is observed that learning in production has significant positive effect on the optimal decisions of the closed-loop supply chain.

Investigating structure of a two-echelon closed-loop supply chain using social work donation as a Corporate Social Responsibility practice

Besides profit, which might be the objective of any business, firms have recently shown more interests toward demonstrating Corporate Social Responsibility (CSR). As many firms are practicing CSR, they are increasingly realizing the benefits of adopting CSR as one of their main operations. Inspired by the increasing CSR practices of business firms, this study takes a practical step in implementation of a CSR activity. It develops a socially responsible closed-loop supply chain (CLSC) model that takes into account donation, as a CSR activity, and recycling of the used products for environmental sustainability. Considering the effects of selling price and social work donation (SWD) on demand, it develops optimal closed form solutions for three decentralized and a centralized channel structures. A comparative analyses is presented to find the best socially responsible environmental friendly decentralized channel structure. Furthermore, the channel coordination problem between the manufacturer and the retailer is investigated using two part tariff contract. The numerical analysis showed that among the three decentralized models, the model in which the retailer promotes and collects the used products from customers generates the best channel performance.

A Coordinated Revenue-Sharing Model for a Sustainable Closed-Loop Supply Chain

This study takes a sustainable closed-loop supply chain composed of one manufacturer and two price-competitive retailers as the object and considers the two-way risk aversion characteristics of manufacturers and retailers in examining the coordination mechanism in a closed-loop supply chain. Using game theory, optimal decision-making on wholesale prices, retail prices, and recycling prices are explored under decentralized and centralized decision-making scenarios, and representative expressions are established. By analyzing the effects of the risk aversion coefficient on players’ optimal strategies, we found that the manufacturer’s and retailers’ risk aversion coefficients have different effects on the wholesale price, retail price, and recycling price under decentralized decision-making, while in a centralized decision-making scenario, the effects are the same. The comparison also found that the wholesale price and recovery price under the centralized decision-making scenario are higher than those under decentralized decision-making. To achieve closed-loop supply chain coordination, we propose a revenue-sharing contract that we demonstrate by coordinating price competition with risk aversion and analyze a range of parameters that influence the revenue-sharing contract. The results show that the proposed contract can increase the profits of supply chain members by identifying the optimal revenue-sharing ratio.

Two stage closed loop supply chain models under consignment stock agreement and different procurement strategies

• Jointly optimizes procurement, production and shipping decisions for a two-stage closed-loop supply chain system. • Presents two mathematical models for two different raw material (RM) replenishment strategies. • Proposes an efficient iterative search algorithm that guarantees convergence to near optimal solutions. • The Incorporation of RM replenishment strategy greatly impacts production sequencing, lot sizing and shipping decisions. This paper seeks to jointly optimize the raw material (RM) procurement and shipping decisions as well as those pertaining to the lot sizing and the production sequencing of manufactured and remanufactured products for a centralized two stage closed loop supply chain, wherein the vendor and the buyer operate under consignment stock partnership. Most of the existing closed loop models have overlooked the tradeoffs involved in optimizing RM replenishment strategy in conjunction with the production sequence, and assumed the predetermined sequence of ( R, P ) where R remanufactured batches are produced first followed by P manufactured batches as this sequence prioritizes the clearance of the accumulated inventory of returned items. As such, we jointly optimize the aforementioned interrelated decisions, alongside others as well, under two RM replenishment strategies; multi-to-one (MTO) and one-to-multi (OTM) where a mathematical model is developed for each strategy. In essence, this work seeks to assess what impact would the incorporation of RM procurement decisions have on the shipping and production policy downstream. Extensive computational experiments, carried out under different settings of the problem parameters, indicate that accounting for RM procurement strategy greatly impacts not only the production sequence, but extends to include the lot sizing and shipping decisions as well. Furthermore, the computational study suggests that it is economically advantageous to synchronize RM orders such that they take place right at the time needed for the production of newly manufactured products.

A new sustainable closed-loop supply chain model for mining industry considering fixed-charged transportation: A case study in a travertine quarry

Mining industries in general and stone mining in particular play a vital-infrastructural role in any economy due to its vast impacts on other sectors such as construction, production, and even banking. The main purpose of this research is to investigate sustainability aspects of mining industry of decorative stone quarries in Iran in general and a specific case study in particular through a mathematical optimization approach. In this paper, a novel closed-loop approach is proposed for the first time (to the best of our knowledge) to be utilized in a real-case travertine quarry. Indeed, a stone quarry is considered and a closed-loop network is provided to determine appropriate strategies for stone wastes and end of life stones of the buildings. The quarry extracts the stone blocks from the mountain and then cut them into the appropriate pieces by wire sawing machines. Besides, at the decorative stone quarry, based on the insight observations, the outputs are in 4 grades based on their quality depend on the fractures and cleavages of the cut stones.In the presented network, by focusing on decorative stones, recycling centers are the main player of collecting, processing, and selling the wastes and end of life stones. In order to regard sustainable approach, minimizing energy consumption is considered as well as profit maximization in the objective functions of the model and service level requirements. In addition, due to the real requirements, fixed-charged is considered in transportations. Then, in order to achieve the Pareto front and the non-dominated solutions, a repetitive ε-constraint approach is developed here. The principal results prove that the sustainable closed-loop approach is able to be implemented successfully in mining industry. The major conclusion of this study specially about the case study show that closed-loop supply chain of decorative stone quarries can be both profitable and feasible.

Modeling and Analysis of a Closed-Loop Supply Chain in Consideration of Extra Demand

In recent years, activities undertaken to reduce environmental impacts – such as recycling and reusing – have been increasing in popularity. For manufacturing companies, designing and using a closed-loop supply chain can help meet social responsibility objectives and enhance competitiveness. A closed-loop supply chain requires the accurate prediction of not only demand but also returned products; however, in the literature, the quantity of returned products is assumed to be dependent on demand. Importantly, the quantity of returned products is influenced by past demand and use periods. Further, some returned products may be treated as end-of-life products, because of quality deterioration. The purpose of this study is to design a closed-loop supply chain model in the context of returned product quantities as affected by past demand, use period, and extra demand, in order to analyze system performance. Herein, the quantity of demand influences the quantity of returned products, and hence the quantity of reusable products. Moreover, the dynamics of returned products, demand, and reusable products will also significantly influence production planning. In this study, fluctuations in the quantity of returned products influence not only production planning but also future demand fluctuations. The results of numerical examples derived from using the model proposed in this study clarify that the quantities of reusable products and manufactured products will fluctuate depending on the return rate, given policies that prioritize the sale of reusable products. This finding suggests that manufacturers need to consider reducing their environmental impact as well as establishing production planning and inventory control policies that contain fluctuations in the quantities of reusable and manufactured products.

Hybrid Genetic Algorithm for Optimizing the Closed-Loop Supply Chain Model with Direct Shipment and Delivery

Hybrid Genetic Algorithm for Optimizing the Closed-Loop Supply Chain Model with Direct Shipment and Delivery

A Closed-Loop Supply Chain with Competitive Dual Collection Channel under Asymmetric Information and Reward–Penalty Mechanism

We investigate a closed-loop supply chain (CLSC) where the retailer and the third-party recycler compete against each other to collect waste electrical and electronic equipment (WEEE) given that collection effort is their private information. Using the principle-agent theory, we develop a CLSC model with dual collection channel without the government’s reward–penalty mechanism (RPM). An information screening contract is designed for the manufacturer to attain real information on collection effort levels; meanwhile, the optimal decision-making results of other decision variables are derived. Next, we take RPM into account to further examine the efficacy of the government’s guidance mechanism in improving collection rate and profits of CLSC members. Our results indicate that (i) the collection competition reduces the total collection quantity and the expected profits of all the CLSC members without RPM; (ii) all CLSC members’ expected profits are improved if both two collection agents select a high collection effort level without and with RPM; (iii) RPM increases buyback price, collection price, collection quantity, and franchise fee but decreases wholesale price and retail price; with the reward–penalty intensity increasing, the manufacturer’s expected profit first decreases and then increases, while the expected profits of H-type retailer and H-type third-party recycler continue to increase. We find that RPM may ultimately stimulate the collection agents to collect more WEEEs, while the intense collection competition reduces the profits of CLSC members.

Sustainability aspects in Inventory Routing Problem: A review of new trends in the literature

Abstract This paper presents a comprehensive content analysis-based literature review of studies on Inventory Routing Problem incorporating sustainability-related aspects. A total of 40 journal articles are selected from Web of Science and Google Scholar databases, and are reviewed by categorizing them into single-objective and multiple-objective models. The review suggests that studies with single-objective models covered areas including waste management (in reverse logistics models), returnable transport item management (in closed-loop supply chain models), waste prevention and reduction (in models with perishable products), and emission reduction (in models with emission caps and carbon price). Studies on reverse logistics are limited to collecting and storing waste at a collection site, while including waste processing and disposal operations could make them more applicable. Studies on closed-loop supply chains are few with a focus on managing returnable transportation items. Future studies could consider remanufacturing, recycling and disposal of products for efficient waste management. Most of the papers in logistics of perishable products considered waste prevention rather than waste reduction. Previous studies related to emission reduction using carbon policies mainly focused on emissions from transportation. Including emissions from other logistics operations could be useful from a practical perspective. Relatively few studies developed multi-objective models. Environmental objectives in multi-objective models focused on minimizing total emissions. Few studies considered social objectives related to minimizing inventory of hazardous material and infectious medical waste, and improving customer satisfaction. Other social aspects such as those related to traffic congestion and job creation could be considered in future studies. Furthermore, application of efficient models and solution approaches to real case studies could be valuable.