Closed-loop Supply Chain Model Research Articles

Decision-making of closed-loop supply chain under Corporate Social Responsibility and fairness concerns

In recent years, manufacturers have been under pressure from consumers and the government in terms of environmental awareness and corporate social responsibility (CSR). The CRS behavior regulated by government subsidy is limited understood and needs attention urgently. In this study, three closed-loop supply chain (CLSC) models, including one decentralized decision-making model without fair concerns, one decentralized decision-making model with fair concerns, and one centralized decision-making model with fair concerns, were designed to for understanding the influence of government subsidy, CSR coefficient, and fairness concerns on decision-making by comparing optimal solutions of these models. Proportion of government subsidy was utilized as a coordination variable to design a joint contract of ‘government subsidy sharing and cost sharing’ and to coordinate decentralized decision-making. On this basis, two extended models, a CSR-based fairness concern model and a government decision-making model, were proposed. Finally, the models are verified by numerical experiments. Conclusions that we drew from this study. Our research shows that: (i) There is a threshold for the manufacturer’s CSR, and CSR works only if it is higher than this threshold. Both the CSR behavior of manufactures and the fairness concerns of retailers can increase consumer surplus, retailer’s profit, and system profit but damage the leading enterprises’ profit. CSR behavior of manufactures can effectively diminish retailer’s fairness concern, but will reduce the efficiency of government subsidy to some degree which differs from past researches. (ii) The impact of retailers’ fairness concern about the profits gap is twofold. On one hand, it decreases the sales price and increases the consumer surplus in the forward supply chain. On the other hand, it decreases the price and quantity of recycling in the reverse supply chain. (iii) The centralized decision-making model has the lowest retail price of products, the highest the recycling price of waste products, and the highest system profit. (iv) After coordination, the retailer’s share of profits increases as the fairness concern increases, but the feasible scope for coordination mechanisms decreases.

Cost-effective subsidy policy for growers and biofuels-plants in closed-loop supply chain of herbs and herbal medicines: An interactive bi-objective optimization in T-environment

The purpose of present study is twofold. Firstly, this introduces a bi-objective closed-loop supply chain (CLSC) network by deliberating on farming of herbs and production plus distribution of associated herbal medicines in manufacturing-chain layer. Reverse-chain layer (RC-layer) recycles used substrates and unused herbs, thus producing biofuels and casing soil. Though majority of well-established CLSC models comprise sole pecuniary objective function, this aims to validates the economic self-reliance of RC-layer. Besides, Governments pay the subsidy to various entities, including the growers to encourage countrywide farming of herbs and the biofuels-plants for the extent of clean fuel produced. Thus, two different partners of same network earn subsidy without analysing trade-off. Secondly, this study develops an emended minmax method based interactive bi-objective optimization algorithm by employing absolute difference function and newly introduced semi-autonomized desired levels in real-life oriented T-environment. In pessimistic business scenario, whereas proposed model turns infeasible in classical interactive fuzzy multi-objective optimization algorithm, proposed algorithm determines corresponding Pareto optimal solution. In optimistic business scenario, optimal net profits to both layers of proposed model are more desirable than respective goals in proposed algorithm. Vulnerability analysis of twelve parameters to proposed model plus twelve subfigures pleads legislators to offer more subsidy to biofuels-plants and slightly lesser to growers; and to enact regulations to intensify the recycling of discarded substrates and herbs, thereby ensuring financial feasibility of RC-layer. Again, reduced subsidy to biofuels-plants and little more subsidy to growers, plus multi-angled modernization of all partners except landfills elevate the profitability of proposed network.

Distributor-Remanufacturing Model for Closed-Loop Supply Chain: Basing on Stackelberg Game Model

Distributor-Remanufacturing Model for Closed-Loop Supply Chain: Basing on Stackelberg Game Model

Government Reward-Penalty Mechanism in Dual-Channel Closed-Loop Supply Chain

This study establishs a dual channel closed-loop supply chain (CLSC) model under a government–penalty mechanism (RPM) consisting a dual-channel manufacturer, a retailer, and the government. We consider a Stackelberg game between the manufacturer and the retailer, and the government rewards or punishes manufacturers on the basis of the collection rate of used products. This paper analyzes the influence of government RPM on the optimal decisions, the relationship between the two sales channels, and the total social welfare of the supply chain system. We find that the government RPM can improve the stability of the dual-channel supply chain and the collection rate of the used products. Moreover, we are the first to provide a method of deriving the optimal government RPM through a numerical example.

Designing an Integrated Multi-Channel Multi Product Closed Loop Sustainable Supply Chain Network Meeting Customer Requirements

Indian manufacturing firms which started by focusing on offline exclusive sales (single channel), are expanding their sales to online domain (multichannel) today. They are still facing a lot of difficulties in interfacing various channels efficiently in their multichannel supply chain network, this integration of different channels increases its customers range to purchase and customer comfort. This paper aims to develop a multiproduct closed loop supply chain model for an Indian kitchenware firm to address their integrating issues between multiple channels take into consideration the environmental and economic sustainability. IBM CPLEX optimiser is used to solve the model for minimising the transportation cost between various stages of supply chain. To take into account the real world factors of customer behaviour, four types of customer zones are selected to accommodate different customer choices. The results show how the optimal supply chain structure is affected by these multichannel customer preferences.

A hybrid metaheuristic algorithm for a data driven leagile sustainable closed-loop supply chain model under disruption risks

In the current situation,taking into consideration the environmental and social issues are related with the production and distribution of products in supplychain systems,due tothe global concerns related with emitting lots of greenhouse gaseswithin the manufacturing process and overlooking the major needs of publicThis paper proposes a newmultiobjectivemodel in the area ofclosed loop supplychainproblem integrated with lot sizing by considering lean,agility and sustainability factors simultaneously.In this regard,responsiveness, environmental,social and economic aspects are regarded in the model besides the capacity and service level constraints.Inaddition,strategic and operational backup decisions are developed to increase the resiliency of the system against disruption of the facilities and routs simultaneously.Next,a robust possibilistic programming approach is applied to handle the uncertainty of the model.To increase the responsiveness of the system,a fuzzyc-means clusteringmethod isapplied to select the potential locations based on the proximity to local customers.In the following, a new hybrid metaheuristic algorithm comprised of a PMOPSO algorithm and aMOSEO is developed to deal with large size problems efficiency and to assess the impact of using a single-based initial solution as the income for the second phase of the proposed hybrid algorithm.To ensure about the effectiveness of the proposed hybrid algorithm,the results of this algorithm arecompared with a NSGA-II.

CLOSED-LOOP SUPPLY CHAIN WITH DELIVERY LEAD TIME ON DIRECT AND INDIRECT CHANNEL

The responsbility of protecting the environment rest with all parties, including manufacturers. Therefore, manufacturers reprocess their used products. Mathematically, it can be explained by closed-loop supply chain (CLSC) model. CLSC is a system that is carried out recycling or remanufacturing. In this study, closed-loop supply chain involves manufacturer and two retailers. Manufacturers sell their product directly to consumers and indirectly through retailers. The purpose of this study is to construct an optimal profit function of each actor. With centralized system , the model is a function of price without constraints by notice delivery lead time. The result shows that delivery lead have an impact to profit each actor. The longer delivery lead time decreases the profit.

Environmentally responsible closed-loop supply chain models with outsourcing and authorization options

Remanufacturing is a common production mode for firms taking part in sustainable operations and the circular economy because it can improve environmental performance, especially via third-party remanufacturing. This paper studies third-party remanufacturing by developing game models for a closed-loop supply chain with one manufacturer and one third-party remanufacturer. Here the manufacturer has two strategies for third-party remanufacturing: outsourcing and authorization. The third-party remanufacturer collects end-of-life products to produce remanufactured products. Unlike the extant literature, this paper takes environmentally responsible behaviors of consumers and firms into consideration and focuses on how green consumption behavior and environmentally responsible behavior affect the manufacturer’s strategy. It finds that when a large gap exists between green consumer preferences for new and remanufactured products, both the manufacturer and the third-party remanufacturer prefer authorization; otherwise, they prefer outsourcing. In addition, it is difficult for them to select the same strategy for third-party remanufacturing when the environmental cost (the cost of not collecting end-of-life products) is high. However, they can reach an agreement in outsourcing scenario in the case of sequentially identical game.

A review of closed-loop supply chain models

Closed-loop supply chain (CLSC) networks have been studied extensively in the literature due to the cost and environmental optimization in operations. A CLSC consists of forward and reverse supply chains. This paper reviews the literature of CLSC networks. 225 peer-reviewed articles that have been published in international journals from 1997 to 2020 are gathered and analysed. The aim is to answer the following main questions: (i) What is the problem domain in CLSC? (ii) Which techniques are utilized frequently in CLSC? (iii) What elements, variables, and objectives are the main focus in the field? (iv) What are the gaps in the literature? After reviewing the literature, observations are provided. Finally, the evaluations conclude suggested improvements and potential future directions in this research field.

Environmental sustainability EOQ model for closed-loop supply chain under market uncertainty: A case study of printer remanufacturing

The traditional economic order quantity (EOQ) model determines the optimal ordering strategy based on the premise that the market demand is constant, which leads to obvious deviations under uncertain circumstances. This work relaxes the limitations of the classical EOQ model and extends the application to closed-loop supply chain (CLSC) systems. First, through stochastic analysis, this revised model quantifies the impacts of market uncertainty on remanufacturing and operations processes. Then, by converting all the production indexes into carbon equivalent emissions, it conducts a comparative analysis of environmental efficiency under different acquisition scenarios. More importantly, based on the quantitative relationship between market uncertainty and production indexes, we devise an optimal ordering strategy for the maximization of environmental benefits under an arbitrary distribution of demand from the perspective of the entire CLSC. Finally, validated by numerical experiments and grounded with the data of printer remanufacturing, we demonstrate that the extended EOQ method can greatly reduce carbon equivalent emissions and improve environmental efficiency. This work provides a theoretical foundation for remanufacturers to formulate optimal ordering strategies under market uncertainty conditions while being more environmentally efficient without significantly increasing production input.

Game Models for Closed-Supply Chain with Different Competition-Cooperation Relationships under Fairness Preference

Considering the complex problem of competition and cooperation among enterprises in the process of product selling and recycling, different coopetition game models of closed-loop supply chain with the fairness preference of a manufacturer and retailers are constructed according to the actual investigation. Then, this study primarily used fairness preference theory and game theory to analyze the impact of fairness preference on the pricing decision, recycling and remanufacturing strategy, and coopetition model selection. The results show that (1) enterprises’ fairness preference would increase the wholesale price and retail price, and the stronger the degree of fairness preference is, the more obvious the trend is; (2) enterprises’ fairness preference is not conducive to recycling and remanufacturing, and the higher level of fairness preference is associated with the lower recycling rate of waste products; (3) enterprises’ fairness preference would not affect the model selection but would benefit the overall profit.

A pricing model of power battery closed-loop supply chain under government subsidies

Government subsidy is a common policy to promote re-manufacturing. In order to explore the pricing and coordination mechanism of power battery production under this policy, a two-period model was proposed. This model combines the supply constraints of partial recovery and full recovery to study the impact of government subsidies on the recovery and fracturing pricing of power battery manufacturers. The study shows that moderate subsidies will increase the recovery rate under both supply constraints. However, high subsidies will increase the output of new power batteries, leading to oversupply, which is not conducive to environmental protection. Therefore, the optimal value of the subsidy is the calculated threshold.

Design of multi-tier multi-time horizon closed-loop supply chain network with sustainability under uncertain environment for Indian paper industry

ABSTRACT Due to increased awareness and strictly imposed legislations, Supply Chain (SC) managers are often forced to include recovery system in their SC. Recovery systems make use of 3 Rs, namely, recycling, reuse and remanufacturing which results in the transformation of traditional SC into closed-loop supply chain (CLSC). Recovery of discarded product in such forms is an effective way to deal with afterlife of product, leading to sustainable development. In this work, a bi-objective CLSC model has been developed for the paper industry under uncertain environment. The first objective of the proposed model is to maximise SC surplus, and the second objective is to incorporate sustainability through minimising carbon content by reducing the number of trucks between various echelons of CLSC network. In the proposed model, sustainability has been considered by two means: first to reduce the demand of next period by refurbishing some of the product collected from the customers and second is to reduce the raw material requirement at vendor side by using some of the recycled and usable product from the recycling centre. Further, various numerical illustrations are being performed and results are interpreted for a case paper industry which validates the application of the proposed model.

A closed-loop supply chain model with uncertain return and learning-forgetting effect in production under consignment stock policy

This paper considers a manufacturer–retailer closed-loop supply chain where the manufacturer’s production process is subject to both learning and forgetting, and inventories of the manufacturer and the retailer are managed by consignment stock policy. The demand of the finished product is linearly dependent on the retail price. The return rate of used product is random and returned used items are inspected to select those which qualify for remanufacturing. The proposed model is demonstrated with a numerical example. A sensitivity analysis is performed to identify the parameters which have significant impacts on the optimal decisions of the supply chain system. Some managerial insights of the model leading to improved strategies beneficial for firms and environment are also discussed.

An Investigation on a Closed-Loop Supply Chain of Product Recycling Using a Multi-Agent and Priority Based Genetic Algorithm Approach

Product recycling issues have gained increasing attention in many industries in the last decade due to a variety of reasons driven by environmental, governmental and economic factors. Closed-loop supply chain (CLSC) models integrate the forward and reverse flow of products. Since the optimization of these CLSC models is known to be NP-Hard, competition on optimization quality in terms of solution quality and computational time becomes one of the main focuses in the literature in this area. A typical six-level closed-loop supply chain network is examined in this paper, which has great complexity due to the high level of echelons. The proposed solution uses a multi-agent and priority based approach which is embedded within a two-stage Genetic Algorithm (GA), decomposing the problem into (i) product flow, (ii) demand allocation and (iii) pricing bidding process. To test and demonstrate the optimization quality of the proposed algorithm, numerical experiments have been carried out based on the well-known benchmarking network. The results prove the reliability and efficiency of the proposed approach compared to LINGO and the benchmarking algorithm discussed in the literature.

A game theoretic incentive model for closed-loop solar cell supply chain by considering government role

ABSTRACT Nowadays, to avoid further damage to the environment and supply the raw materials from the used solar cells, some countries are trying to recycle the used solar systems. In this paper, we develop a three-echelon closed-loop solar cell supply chain (CLSCSC) including a supplier, a third-party logistics (3PL), and an assembler considering two kinds of solar cells, dye-sensitized and perovskite. The return amount of used solar systems depends on the environmental awareness level of customers, the third-party logistics’ effort for collection, the return price of used solar systems, and the efficiency of solar cells. This problem is modeled by a Stackelberg game, where the 3PL is a follower and the supplier and the assembler are the chain leaders. Moreover, the government incentive schemes in CLSCSC by assigning the subsidy for technology R&D and manufacturing costs for supplier and dedicating the subsidy for collection cost to encourage the 3PL to collect more used solar systems are also analyzed. The government’s subsidy makes an effort to return more solar cells in the chain. According to the results, the efficiency of the new solar cell (dye-sensitized and perovskite) under government intervention is almost two times more than the new solar cell’s efficiency without government intervention. Besides, the collection effort under government intervention is 2% more than the collection effort without government intervention. Finally, managerial insights are considered for the proposed model.

Pricing and used product collection strategies in a two-period closed-loop supply chain under greening level and effort dependent demand

This article presents a two-period closed-loop green supply chain model with a single manufacturer and a single retailer to investigate the impact of green innovation, marketing effort and collection rate of used products on the supply chain decisions. The market demand of the green product is assumed to be dependent on the selling price, greening level and marketing effort. In the first period, the manufacturer produces new product from fresh raw materials while in the second period, besides manufacturing new products, he also collects and remanufactures used products. The centralized model and three decentralized models (depending on the manufacturer’s collection option of used products) are considered. A cost sharing contract is also employed to address the coordination issue. The optimal results are obtained, and the effect of key model-parameters on the optimal decisions are investigated through sensitivity analysis. It is observed that the supply chain gives better response when both the manufacturer and the retailer collect used products simultaneously, and the performance of the supply chain can be improved by instigating either green innovation or marketing effort or both.

Competitive dual-collecting regarding consumer behavior and coordination in closed-loop supply chain

Facing multiple collecting channels for used products, consumers may choose the online collection service provided by third-party platforms for convenience, which also brings competition to other channels. To explore the influence of consumer behavior on the competitive dual-collecting supply chain, we build two closed-loop supply chain models with dual-collecting channels: one in which the used products are collected by the retailer and the third-party (model RT) and another in which the used products are collected by the manufacturer and the third-party (model MT). Results show that, with increasing consumer preference to the third-party collecting channel in model RT, the manufacturer’s optimal decisions maintained, while the optimal collecting prices of the retailer and the third-party decrease. In model MT, the manufacturer’s optimal decisions are not affected by consumer preference, but the third-party’s collecting price decreases. In addition, the numerical analysis shows that in both models, the total collecting quantity and the overall profit decrease. Accordingly, we use revenue sharing contracts and two-part tariff contracts to coordinate the reverse channels. We find that the latter one can coordinate both model RT and model MT, while the former one cannot, and besides, the influence of consumer preference on contract parameters is studied.

The Impacts of Product Life and Recyclability on Landfill Disposal in Closed Loop Supply Chains

For a single type of product, the authors formulate a series of closed loop supply chain models of a manufacturer, a service provider, and a customer. The manufacturer takes back a leased product after it provides a certain number of services and recycles a fraction of materials from the used product. They investigate how the manufacturer's decision on product life and recyclability are influenced by external conditions like landfill disposal costs and recycling subsidies (on materials and facilities). Through analytical and numerical studies, managerial insights and policy implications are derived. For practitioners, (1) a landfill disposal cost threshold exists above which it is economically viable to recycle the used products; (2) as the landfill disposal cost increases, they will increase the product life and decrease the recyclability; (3) as the recycling subsidy increases, they will decrease the product life and increase the recyclability. For a policy maker, how to subsidize the recycler based on the recycled materials amount or on the recycling facility cost is also investigated.

Coordination of Closed-Loop Supply Chain with Dual-Source Supply and Low-Carbon Concern

Considering the impact of dual-source supply and low-carbon manufacturing on a closed-loop supply chain (CLSC) system, this article constructs a CLSC model with two competitive dominant upstream suppliers and one following a downstream (re-)manufacturer, then coordinates supply chain through cost-sharing contract. Based on the industrial case in the area of power battery, we analyze the optimal strategies under competition, cooperation, and coordination structures separately and then investigate the influences of emission reduction effort and collection efficiency on supply chain performance. The results reveal that collection of used products can positively affect the (re-)manufacturer’s profit but has opposite impact on the new component supplier. Besides, recycling is beneficial to both low-carbon consumers’ utility and social welfare, but hurts the total profit of CLSC because of the high investment cost of collection. Therefore, the paper designs a cost-sharing contract, which is of applicability and efficiency for both economic and environmental development. Furthermore, it can also increase the profit of CLSC up to cooperation case and improve each member’s profit, eliminating double marginal effect and achieving supply chain coordination.