Reverse Supply Chain System Research Articles

Reverse Supply Chain Modeling at XYZ Recycling Company

Attention to the reverse supply chain is increasing due to the increasing value of products and technologies at the end of the supply chain as well as the direct impact of new environmental legislation. Design strategies for reverse supply chains remain relatively unexplored and underdeveloped. Meanwhile, measuring supply chain performance has also become important as understanding, collaboration and integration have increased among supply chain members. It also helps companies to target profitable market segments or identify areas for improvement. Reverse supply chains are seen as one way to increase profits for companies. Company XYZ is a company that operates in recycling products from surrounding shops. This paper will focus on measuring reverse supply chain performance at XYZ recycling company. A simple general framework of the company will be presented as well as its mathematical model. This simple general model is considered applicable by small and medium businesses to optimize their reverse supply chain systems

Improving the sustainability of a reverse supply chain system under demand uncertainty by using postponement strategies.

In recent decades, issues of resource depletion and waste piling have grown at an alarming rate, which are happening in the cases of product wastes with significant residual values, such as e-waste. To address these issues, stakeholders have focused to develop a reverse supply chain (RSC) system that can sustain profitable takeback, reuse, and recycling operations in the long-term. Such a system requires efficiency in handling complex operations involving various players while being responsive to demand uncertainty and changes. One way in realizing these capabilities is by incorporating postponement concepts to the integrated RSC network, allowing the delay of operations susceptible to demand uncertainty. This study pioneers the formulation of a two-stage stochastic mixed-integer model of a multi-player RSC with speculation-postponement strategies. The sample average approximation method is used to solve and verify the proposed model that has an uncertain demand. Various speculation-postponement strategies, namely, disassembly, reconditioning, and reassembly strategies are developed to configure forecast and demand-driven RSC operations, including the purchasing, product takeback, production planning, inventory, and item speculation decisions. Numerical examples of the notebook computer RSC demonstrate that utilizing the right operation postponement can increase the network's flexibility, allowing better economic performances even under high demand uncertainty risks and stricter environmental regulations. In various cases, the RSC performs better with speculation-postponement strategies than without postponement strategy, demonstrating the proposed model's superiority. This study can provide insight to decision-makers to improve RSC sustainability through postponement. Moreover, the model is generic and can be applied to other products as well.

Pricing and coordination in a reverse supply chain with online and offline recycling channels: A power perspective

Faced with a large number and a wide variety of used products, it is of great significance to study how to design an effective reverse channel for recycling waste products, to obtain better economic and environmental benefits. In this paper, we explore how various channel power structures affect the pricing decisions and coordination in a reverse supply chain (RSC) with competitive online and offline recycling channels. One centralized and three decentralized RSC models are established under three power structures: remanufacturer-led, collector-led, and vertical Nash. Through equilibrium comparison, we find that either the remanufacturer or the collector has sufficient incentives to lead the RSC, however, the balanced power structure (Vertical Nash) is more favorable to the RSC system. In addition, we design a mechanism, which consists of an online acquisition price scheme and a two-part tariff contract, to coordinate dual-recycling channel RSCs under various power structures. Finally, we extend the model to asymmetric initial collection quantity and asymmetric recycling channel cost cases and verify the robustness of our basic propositions. Our analysis generates managerial insights into the relationship between the channel power structure and recycling channel competition and provides guidance for strategic decisions by remanufacturers and recyclers in dual-recycling channel RSC.

Analysis of the influence of reinvestment cost correlation factors on optimal decision of reverse supply chain

Recycling plays an important role in the reverse supply chain. However, the recycling quality of waste products is highly uncertain. As a related factor of reinvestment cost, quality difference affects the optimal decision in reverse supply chain. By constructing a pricing and profit model based on Stackelberg game theory, this paper studies the reverse supply chain composed by a single manufacturer and a single retailer. The model is designed to analyse the effect of quality difference on their reinvestment cost and optimal decision that results in the optimised reverse supply chain and improved profits. The result shows that the reinvestment cost is directly proportional to the quality level of recycling, inversely proportional to the quality cost coefficient. The higher the recycling quality level, the lower the cost coefficient, the greater the profit of members in the reverse supply chain system gets and the total profit of the system.

Strategic introduction of an online recycling channel in the reverse supply chain with a random demand

Nowadays, the online recycling model becomes increasingly popular. More and more firms are gradually conducting a model with both offline and online recycling channels. Unfortunately, few works in the literature concern about it. Taking the random demand of remanufactured products into consideration, we establish a theoretical model in which the remanufacturer plays as a game leader and the recycler acts as a follower. We study three recycling channel models, namely a single offline recycling channel (Model A), a single online recycling channel (Model B) and mixed recycling channels (Model C). We obtain the optimal pricing and recycling quantities decisions, as well as the corresponding profits. Results show that the mixed recycling channels model can help reduce the transferring price under some conditions and force the recycler to raise the recycling price. As a result, the introduction of an online recycling channel can always benefit the remanufacturer but hurt the recycler. Furthermore, regarding the reverse supply chain system, we uncover that the introduction of an online channel can be beneficial or harmful. In particular, the mixed recycling channels model may be worse off than the single offline recycling channel model under a specific condition.

Reverse supply chain systems optimization with dual channel and demand disruptions: Sustainability, CSR investment and pricing coordination

In the information age, demand disruptions are challenging for supply chain (SC) systems. This study explores a reverse supply chain (RSC) system dealing with demand disruptions in its online channel. The disruptions hurt the company's revenue since a fraction of the online channel demand will be lost. It is also important to determine the level of investment in sustainability to meet both the cap-and-trade rule imposed by the government on the company and the customers' expectations about the sustainability level of products. In the reverse channel, the company collects the used products through a collector whose efforts increase the collection volume. Since the earnings of the reverse channel highly depend on the collection volume, finding an effective strategy to entice the collector to collect a desirable number of used products is critically important for the company. In order to find a proper strategy for resolving these challenges, we analytically develop an RSC model and derive the optimal pricing, sustainability level, and corporate social responsibility (CSR) decisions under demand disruptions for both the decentralized and centralized RSCs. We then propose a combination scheme by using the combined two-part-tariff (CTPT) contract. We find that the proposed coordination scheme is efficient because it not only improves the profits of the RSC and its members but also enhances the environment. Moreover, the CTPT contract can properly allocate the SC surplus among the RSC members based on their bargaining powers.

Reverse Supply Chain Systems Coordination Across Multiple Links With Duopolistic Third Party Collectors

The proper supply of end-of-life (EOL) items plays a critical role in the success of remanufacturing systems. In many real-world practices, a remanufacturer has multiple links with independent third party collectors, while these links should be simultaneously coordinated. However, most previous studies mainly focus on reverse supply chain (RSC) coordination in a one-to-one setting (single link). Moreover, the competition among third party collectors affects the acquisition of EOL products and this is an important issue. In this paper, an RSC consisting of a single remanufacturer and duopolistic competing third party collectors is explored and a new mechanism is proposed to achieve channel coordination across multiple links. To be specific, we consider the case when the collectors compete on the acquisition prices offered to the consumers and the remanufacturer decides on the pricing and environmental effort decisions with two considerations: 1) increasing return of EOL items and 2) boosting demand of remanufactured products. The optimal decisions of RSC members and performance of RSC are analyzed under different behaviors of competing collectors. Moreover, a multilateral two-part tariff contract is proposed to coordinate the decisions across multiple links. The results indicate that the proposed contract improves not only profits of the remanufacturer and competing collectors but also the collection quantity of EOL items and demand of remanufactured products, which helps improve the environment.

Corporate Social Responsibility Practices in the U.S.: Using Reverse Supply Chain Network Design and Optimization Considering Carbon Cost

A research model using the market price for greenhouse gas (GHG) emissions illustrates how the policies, and economic and environment implications of the carbon price can be formulated using a deterministic equilibrium model. However, with increasing carbon costs, the optimal reverse supply chain (RSC) system is being required to adapt and has undergone many distinct shifts in character as it seeks out new configurations through which costs may be effectively managed and minimized. The model was studied comprehensively in terms of quantitative performance using orthogonal arrays. The results were compared to top-down estimates produced through economic input-output life cycle assessment (EIO-LCA) models, providing a basis to contrast remanufacturing GHG emission quantities with those realized through original equipment manufacturing operations. Introducing a carbon cost of $40/t CO2e increased modeled remanufacturing costs by 2.7%, but also increased original equipment costs by 2.3%. The research presented in this study puts forward the theoretical modeling of optimal RSC systems and provides an empirical case study concerning remanufactured appliances, an area of current industrial literature in which there is a dearth of study.

Recycling of lifetime dependent deteriorated products through different supply chains

Conservation of natural resources in order to protect the environment, support the economy, and offer a better life to living beings has become an urgent need of modern business so that future generations can survive within available resources and in a healthy environment. Recycling of used products plays an important role in the conservation of natural resources and the development of sustainable business for deteriorating products because the number of these items increases with time, which creates economic loss and environmental pollution. This paper considers the production and cycle time as decision variables to design a forward and reverse supply chain system that produces two different types of products, which are subject to deterioration. Rate of deterioration is time-varying and depends on the maximum lifetime of products. Used products of a forward supply chain are collected and treated as raw materials in a reverse supply chain to produce other products. The system involves three types of inventory stocks,i.e., product 1, 2, and returned inventory. The objective of this research is to minimize total cost per unit time for two types of systems, one in which products of both the supply chains deteriorate and the second in which the products of the first supply chain deteriorate. Kuhn−Tucker method is employed to solve the model and a solution algorithm is proposed to obtain optimal solution. Application of the model is supported with numerical examples and sensitivity analysis. Some managerial insights are provided to help managers while applying the proposed models in real situations. Results of numerical experiments suggest for deteriorating products to plan short replenishment cycles of inventory.

Strategic planning: Design and coordination for dual-recycling channel reverse supply chain considering consumer behavior

In this paper, we consider a two-echelon reverse supply chain with dual-recycling channels where the recyclable dealer acts as a Stackelberg game leader and the recycler acts as a follower. Due to the price competition between these two channels, the dominant dealer always faces a challenge on how to strategically design the reverse channel structure. By introducing consumer preference for the online recycling channel into the model, we examine the challenge in three scenarios: single traditional recycling channel, single online-recycling channel, and a hybrid dual-recycling channel with both centralized and decentralized cases. We investigate two problems that are comprised of designing and coordinating a reverse supply chain with a traditional and an online recycling channel. The results show that the dual-recycling channel always outperforms its single channel counterparts from the recyclable dealer's and system's perspectives. In the coordination problem, a contract with transfer and online recycling prices can coordinate the dual-recycling channel reverse supply chain but harms the dealer. Therefore, we propose two complementary contracts – a two-part tariff contract and a profit sharing contract – which succeed in coordinating the reverse supply chain system and create a win-win situation. Finally, numerical examples illustrate the model, and results show that the consumer preference for online recycling affects the acceptance of the above contracts for the recyclable dealer.

Optimizing fuzzy reverse supply chain for end-of-life vehicles

The rapid development of new technologies, such as the anti-lock braking system, navigation or Global Positioning System, and electronic fuel injection, has shortened the life cycles of vehicles. Currently, the average life cycle of vehicles in Japan is around 10years. Hence, the disposal of end-of-life vehicles (ELVs) has placed heavy pressure on both the environment and human life given its negative effects. To achieve sustainable development, ELVs must be properly handled through depollution, reuse, recovery, or recycling, among others. Considering its efficiency, effectiveness, and practical advantages, reverse supply chain management has been adopted in several industries and viewed as a highly prominent option among suggested tactic solutions for solving this issue. In this study, a model of multi end-of-life vehicle reverse supply chain system with fuzzy parameters is studied. The proposed model is subsequently transformed into the equivalent auxiliary crisp model through an appropriate approach, that is, linear programming with fuzzy parameters, and the final preferred compromise solutions are determined. Finally, a numerical example is presented to illustrate the capability of and provide insights into the proposed model.

Measuring Performance of Reverse Supply Chains in a Carpet Manufacturer

Increasing attention has been given to the reverse supply chain because of the increasing value of products and technology at the end of direct supply chains as well as the impact of new green legislation. Design strategies for reverse supply chains have remained relatively unexplored and underdeveloped. Meanwhile measuring supply chain performance has also become important as understanding, collaboration and integration has increased between supply chain members. It has also helped companies to target profitable market segments or identify areas for service improvement. This paper will focus on measuring performance of reverse supply chains in carpet manufacturers. A simple general framework of the company is presented as well as mathematical models. This simple general model can be to be applied by small medium enterprises to optimise their reverse supply chain systems.

Production Decisions in Remanufacturing with Uncertain Return and Demand

In this paper we analyze a reverse supply chain system that satisfies the market demand with remanufactured products. Demand is assumed to be random and the expected return is to be price-dependent. A firm needs to make recovery and production decision in the face of this uncertainty. We analyze both centralized and decentralized models to determine the optimal acquisition price and the optimal production quantities of remanufactured product for the firm. We also coordinate the decentralized systems with a two-part tariff contract and determine the optimal contract parameters. Finally, we present our numerical analyses to observe the effect of cost parameters on the system performance.

Forecasting product returns for recycling in Indian electronics industry

Purpose – The purpose of this paper is to develop a model for forecasting product returns to the company for recycling in terms of quantity and time. Design/methodology/approach – Graphical Evaluation and Review Technique (GERT) has been applied for developing the forecasting model for product returns. A case of Indian mobile manufacturing company is discussed for the validation of this model. Survey conducted by the company and findings from previous research were used for data collection on probabilities and product life cycle. Findings – Product returns for their recycling are stochastic, random and uncertain. Therefore, to address the uncertainty, randomness and stochastic nature of product returns, GERT is very useful tool for forecasting product returns. Practical implications – GERT provides the visual picture of the reverse supply chain system and helps in determining the expected time of product returns in a much easier way but it requires probabilities of different flows and product life cycle. Both factors vary over a period, so require data update time to time before implementation. Originality/value – This model is developed by considering all possible flows of sold products from customer to their reuse, store or recycle or landfill. First time this type of real life flows have been considered and GERT has been applied for forecasting product returns. This model can be utilized by managers for better forecasting that will help them for effective reverse supply chain design.

Game Analysis of Reverse Supply Chain Based on Government Regulation

Extended producer responsibility (EPR) system is an environmental protection strategy to recycle end-of-life products. A dynamic analysis model between the government and the reverse supply chain (RSC) system operated under the EPR instrument was established. Game theory was applied to analyze the optimal fiscal policy of the government and the optimal decision of the participating enterprises. It concludes that governments environmental regulation is effective to improve the manufacturers remanufacturing rate and the recyclers effort-extent.

Planning of capacity, production and inventory decisions in a generic reverse supply chain under uncertain demand and returns

There is a growing interest for the design and operation of reverse supply chain systems due to the cost and the legislation issues. In this paper, we address the disassembly, refurbishing and production operations in a reverse supply chain setting for modular products such as computers and mobile phones considering the uncertainties in this system, which are the return amounts of the used products and demand for final products. We develop a large-scale mixed integer programming model in order to capture all characteristics of this system, and use two-stage stochastic optimisation and robust optimisation approaches to analyse the system behaviour. In the first stage, we focus on the strategic decisions about the capacities at disassembly and refurbishing sites considering different scenarios regarding the uncertainties in the system. In the second stage, we analyse the operational decisions such as production, inventory and disposal rates. We observe through our extensive numerical analysis that the randomness of demand and return values effect the performance of the system substantially and the uncertainty of the return amounts of used products is much more important than the uncertainty of demand in this system.

Dynamic Models and Coordination Analysis of Reverse Supply Chain with Remanufacturing

In this paper, we establish a reverse chain system with one manufacturer and one retailer under demand uncertainties. Distinguishing between the recycling process of the retailer and the remanufacturing process of the manufacturer, we formulate a two-stage dynamic model for reverse supply chain based on remanufacturing. Using buyback contract as coordination mechanism and applying dynamic programming the optimal decision problems for each stage are analyzed. It concluded that the reverse supply chain system could be coordinated under the given condition. Finally, we carry out numerical calculations to analyze the expected profits for the manufacturer and the retailer under different recovery rates and recovery prices and the outcomes validate the theoretical analyses.

The use of recycled materials in manufacturing: implications for supply chain management and operations strategy

In this study we explore the implications of using recycled versus virgin materials for supply chain structure and supplier relationships, as well as the broader effects on operations strategy in an evolving sustainable environment. We focus on the corrugated cardboard industry, where vertical integration is common, and non-integrated firms are both customers and competitors of integrated firms. These multiple supplier/customer/competitor relationships provide a complex environment to observe changes in the supply chain with the addition of a reverse supply chain system using recycled materials. Based on the findings from an in-depth case study we posit several propositions related to the use of recycled materials, supply chain structure, supplier relationships, and operations strategy. In summary, because the benefits of the changes in the supply chain and supplier relationships accrue primarily to non-integrated firms, we expect the use of recycled material inputs to be dominated by non-integrated firms, and with decreasing capital costs over time, and the ratio of non-integrated to integrated firms using recycled materials will increase. Further, we expect smaller non-integrated firms to access the market for recycled materials differently from larger integrated firms, with the smaller firms more likely to employ non-price-based means for securing their supply of recycled material inputs. Finally, since non-integrated firms are likely to have different operations strategies than integrated firms, we expect the use of recycled materials to indirectly lead to greater use of non-cost-based operations strategies and facilitate the emergence of new operations strategies in the industry.