Dynamic models of closed-loop supply chain and robust H∞ control strategies

To meet the current environmental challenges and sustainable development, closed-loop supply chain (CLSC) management has become increasingly important and urgent. In this paper, we mainly consider three uncertainties: (1) uncertainty of time-delay in re-manufacturing and returns, (2) uncertainty of system cost parameters, (3) uncertainty of customers’ demand disturbances. Using control theories we dynamically analyse and establish a class of dynamic closed-loop supply chain models of linear discrete time system, including the product return model, the re-manufacturing model and the third party reverse logistic providers (3PRLP) collecting model. Furthermore, we analyse the robust operations in the closed-loop supply chains and bring forward relative strategies with robust H_∞ control methods. Finally, according to the practical operations of scrap supply chain in the Chinese steel industry, we carry out some simulation calculations to prove how our proposed robust H_∞ control strategies can restrain all uncertainties of our closed-loop supply chain system. Our analyses and results may be helpful for further insight into closed-loop supply chain uncertain operations and production control, for both theoretical researchers and practitioners, especially for those in the Chinese steel manufacturing industry.     

What is the role of value-added service in a remanufacturing closed-loop supply chain?

While the previous literature overlooks value-added service in a closed-loop supply chain (CLSC), we consider new research problems with embedding value-added service into remanufacturing models. In this paper, we mainly study the role of value-added service in a CLSC and investigate how the value-added service influences profits and other decision variables. Then, we evaluate the performance of the CLSC in different service structures, where a manufacturer or a retailer provide the value-added service. Systematic comparisons and numerical studies show that the supply chain is more effective when service is provided by a manufacturer rather than by a retailer. Also, value-added service improves the whole supply chain performance and plays a regulatory role in a CLSC and influences the decisions of supply chain members. We also show that while a service cost-sharing mechanism can only optimise rather than achieve the supply chain coordination, and the degree of optimisation depends on cost-sharing percentage, the two-part tariff contract can be an effective mechanism to coordinate decentralised service scenarios by generating the same supply chain performance in a centralised service architecture model.     

A GIS-based green supply chain model for assessing the effects of carbon price uncertainty on plastic recycling

Recycling plastic can abate the environmental pollution as well as CO₂ emissions by saving the carbon-intensive feedstock input. The uncertain carbon price places significant effects on the establishment and operation of the whole supply chain. This study develops a green supply chain model combined with geographic information system (GIS) to account for carbon price uncertainty and evaluate its effects on the closed-loop supply chain (CLSC) of plastic recycling. A two-stage stochastic programming model is constructed, in which the stochastic variable, CO₂ price is modelled as a geometric Brownian motion process. Six scenarios are designed with respect to price expectation and volatility. A case study is performed with the GIS information of the plastic supply chain in Zhejiang province, China. The results illustrate that triggering the establishment of reverse logistics requires a carbon price threshold significantly beyond the current level. Lower price volatility would facilitate the decision-making of investment into the reverse logistics. Mechanisms to alleviate the market variation shall be introduced. A sound market condition is desired to obtain the optimal balance that encourages the CLSC without creating extra pressure on the firms. The proposed modelling framework can be easily applied to other sectors with similar characteristics.     

Closed-loop supply chains of reusable articles: a typology grounded on case studies

Reuse practices contribute to the environmental and economical sustainability of production and distribution systems. Surprisingly, reuse closed-loop supply chains (CLSC) have not been widely researched for the moment. In this paper, we explore the scientific literature on reuse and we propose a definition for reusable articles and a typology integrating different categories of articles (transportation items, packaging materials, tools) under the term ‘reusable articles’. Our definition shows how reusable articles are different from other types of recovery, such as remanufacturing or recycling. We also point out specific research needs for those articles. We have based our results on a set of case studies developed in real industrial settings, which have also been contrasted with cases available in the existing literature.     

The impact of supply chain disruption on the closed-loop supply chain configuration profit: a study of sourcing policies

A closed-loop supply chain configuration (CLSCC) encompasses the decisions related to the optimal selection of options at each stage of a closed-loop supply chain (CLSC) for the introduction and reconstruction of new products. The extant literature ignores the impact of supply chain disruptions on CLSCC. An attempt is made to fill this gap in this study. Thus, an integrated multi-sourcing CLSCC optimisation model for new and reconstructed products is developed. The optimisation model presented is a mixed-integer nonlinear programming (MINLP) model. Based on a real-world case study of an auto-parts manufacturer in India presented, a comprehensive set of computational experiments, scenario analyses are conducted. The key finding/observation that resulted from our computational experiments is that multi-sourcing generates higher net present value of total profit compared to single sourcing under the risk of supply chain disruption. Several other observations and managerial insights are drawn from computational experiments, and scenario analyses. Firms interested in configuring their CLSC under the risk of supply chain disruption may use the study's outcomes to understand the profit impact of various CLSCC parameters, individually and in combination.     

具有延保服务的闭环供应链回收渠道选择

针对具有延保服务的闭环供应链（CLSC）回收渠道选择问题，构建了3种回收渠道（制造商回收、零售商回收、第三方回收）和2种延保服务提供者（制造商、零售商）组合而成的6种分散决策CLSC模型，基于博弈论方法研究了每种情形下的最优回收渠道选择及其对CLSC决策的影响。结果表明，无论是制造商还是零售商提供延保，零售商都是产品回收最有效的承担者，此时制造商、零售商和整个CLSC都可以获得最大的利润，且产品回收率也最高。     

Antecedents of implementation success in closed-loop supply chain: an empirical investigation

Implementation of closed-loop supply chain (CLSC) has gained increased consideration in the last few years owing to an increase in environmental concerns, product returns and scarcity of natural resources. It aids in improving environmental, economic and social performances. The purpose of this study is to examine the impact of CLSC critical success factors (CSFs) on performance outcomes. Firstly, CSFs and performance outcomes are extracted by conducting exploratory factor analysis using SPSS software. Then, the relationships between CLSC CSFs and performance outcomes are empirically tested by Partial Least Squares-Structural Equation Modelling (PLS-SEM) approach, using the data collected from 138 professionals working in remanufacturing, refurbishing and recycling operations in North American manufacturing organisations. Empirical analysis demonstrates that CSFs, ‘environmental concerns’, ‘sustainable production’ and ‘product design and collection’ have a significant positive effect on environmental performance. Results also validate the significant positive effect of CSFs, ‘demand and inventory management’ and ‘raw material prices’ on economic performance. In our knowledge, this is the first study that examines the impact of CLSC CSFs on performance outcomes. The results provide managers in manufacturing organisations with insights on most important CSFs that improve performance.     

Pricing and warranty decisions in a two-period closed-loop supply chain

For a two-period closed-loop supply chain (CLSC) consisting of a manufacturer and a retailer, Stackelberg game analyses are conducted to examine pricing and warranty decisions under two warranty models depending on who offers warranty for new and remanufactured products and the corresponding benchmark models with a warranty for new products only. Next, we identify the conditions under which warranty for remanufactured products is offered and investigate how this warranty affects the CLSC operations. Subsequently, comparative studies are carried out to examine equilibrium decisions, profitability and consumer surplus of the CLSC between the two warranty models. Analytical results show that offering warranty for remanufactured products does not affect new product pricing in period 2, but influences the pricing of new products in period 1 and remanufactured products in period 2, thereby enhancing remanufacturing, individual and channel profitability, and consumer surplus. Compared to the retailer warranty for remanufactured products, the manufacturer warranty can attain a more equitable profit distribution. If the warranty cost advantage of the manufacturer (retailer) is significant relative to that of the retailer (the manufacturer), the manufacturer (retailer) arises as a natural choice to offer warranty for remanufactured products as this decision enhances both profitability and consumer surplus.     

Product recovery optimization in closed-loop supply chain to improve sustainability in manufacturing

When business practices shift from a traditional open supply chain to a closed loop instead, the environmental and societal issues are efficiently integrated in business development. However, even an efficiently integrated shift introduces a number of trade-offs due to the contradictory goals that emerge from that business’s economical, environmental and social dimensions. In this paper, we propose a multi-objective mixed integer mathematical problem for a generic closed-loop supply chain (CLSC) network to rationalise how a system’s product recovery helps to improve manufacturing sustainability. The CLSC network proposed in this study consists of a hybrid manufacturing facility, warehouse, distribution centres, collection centres and a hybrid recovery facility (HRF). The proposed model determines the best location for the HRF and optimal flow of products, recovered parts and material in the network while it simultaneously maximises profit, saves activity costs, helps to decrease the harmful effects of the manufacturing process and makes a positive impact on societal development. To validate the model, a numerical illustration with the help of a case study from an electrical manufacturing industry is offered. The results authenticate the approach of the model towards the fulfilment of various environmental regulations. A sensitivity analysis, completed on demand, and the return rate also assists decision-makers to manage their decisions with a broader insight towards manufacturing sustainability.     

Dual channel closed-loop supply chain coordination with a reward-driven remanufacturing policy

This paper investigates a reward-driven policy, employed in a closed-loop supply chain (CLSC), for acquiring used products earmarked for remanufacture. Under the examined model, a single manufacturer sells products through a retailer as well as directly to end users in a forward supply chain. In the reverse supply chain, three different modes of collection are employed to capture used products for remanufacture: they are through a third party, directly by the manufacturer and from the retailer. Mathematical models for both non-cooperative and centralised scenarios are developed to characterise the pricing decisions and remanufacturing strategies that indicate individual and overall supply chain performance. Optimality of all the proposed models is examined with theory. To coordinate and achieve a win–win outcome for channel members, we proposed a three-way discount mechanism for the manufacturer. Extended numerical investigation provides insights on ways to manage an efficient reward-driven CLSC in a dual-channel environment.     

A three-stage model for closed-loop supply chain configuration under uncertainty

In this paper, a general closed-loop supply chain (CLSC) network is configured which consists of multiple customers, parts, products, suppliers, remanufacturing subcontractors, and refurbishing sites. We propose a three-stage model including evaluation, network configuration, and selection and order allocation. In the first stage, suppliers, remanufacturing subcontractors, and refurbishing sites are evaluated based on a new quality function deployment (QFD) model. The proposed QFD model determines the relationship between customer requirements, part requirements, and process requirements. In addition, the fuzzy sets theory is utilised to overcome the uncertainty in the decision-making process. In the second stage, the closed-loop supply chain network is configured by a stochastic mixed-integer nonlinear programming model. It is supposed that demand is an uncertain parameter. Finally in the third stage, suppliers, remanufacturing subcontractors, and refurbishing sites are selected and order allocation is determined. To this end, a multi-objective mixed-integer linear programming model is presented. An illustrative example is conducted to show the process. The main novel innovation of the proposed model is to consider the CLSC network configuration and selection process simultaneously, under uncertain demand and in an uncertain decision-making environment.     

Collection channel and production decisions in a closed-loop supply chain with remanufacturing cost disruption

Enterprise risk management (ERM) focuses on managing functions of an entire business, with special attention to supply chain uncertainty. Managing supply chain through effective ERM will mitigate firm exposure to risk in operations and ensure the success of the business. We study collection channel and production decisions in a closed-loop supply chain (CLSC) with one dominant manufacturer and one retailer, from the perspective of both firm profit and system robustness. A robust system is desired as only minimal changes in production plan are necessary when facing disruption, and is valuable for enterprise risk reduction. We find that without disruption the indirect (retailer) collection channel achieves higher profit than that of the direct (manufacturer) channel, which is also true under some disruption cases. However, the direct channel is more robust when facing disruption, and generates more profits for manufacturers when the positive disruption is large. We also find that the revenue-sharing contracts are effective in coordinating members of the CLSC. Finally, we conduct numerical studies to validate the models and derive managerial insights.     

Modelling product-recovery processes in closed-loop supply-chain network design

Recent changes in environmental requirements have forced manufacturing operations to face a new challenge, which is to develop green strategies to design supply chains and their processes. This study describes the specific features of green supply-chain design considering end-of-life products. We propose a mixed integer linear programming model to obtain the optimal closed-loop supply-chain (CLSC) network design, in which recovery process occurs in three different ways: material recovery, component recovery, and product recovery. An extensive analysis is supported by numerical results which inform CLSC managers about the opportunities of enhancing product returns in terms of quality and quantity. To define a better CLSC strategy to increase system profitability, the volume of product returns and corresponding quality conditions should be considered in the design of a CLSC network. The numerical study provides information for us to discuss the potential benefits of product-recovery processes and the reaction of system profitability to the changes in specific CLSC parameters.     

Reliable design of a closed loop supply chain network under uncertainty: An interval fuzzy possibilistic chance-constrained model

This article seeks to offer a systematic approach to establishing a reliable network of facilities in closed loop supply chains (CLSCs) under uncertainties. Facilities that are located in this article concurrently satisfy both traditional objective functions and reliability considerations in CLSC network designs. To attack this problem, a novel mathematical model is developed that integrates the network design decisions in both forward and reverse supply chain networks. The model also utilizes an effective reliability approach to find a robust network design. In order to make the results of this article more realistic, a CLSC for a case study in the iron and steel industry has been explored. The considered CLSC is multi-echelon, multi-facility, multi-product and multi-supplier. Furthermore, multiple facilities exist in the reverse logistics network leading to high complexities. Since the collection centres play an important role in this network, the reliability concept of these facilities is taken into consideration. To solve the proposed model, a novel interactive hybrid solution methodology is developed by combining a number of efficient solution approaches from the recent literature. The proposed solution methodology is a bi-objective interval fuzzy possibilistic chance-constraint mixed integer linear programming (BOIFPCCMILP). Finally, computational experiments are provided to demonstrate the applicability and suitability of the proposed model in a supply chain environment and to help decision makers facilitate their analyses.     

Incorporating risk measures in closed-loop supply chain network design

This paper considers a location-allocation problem in a closed-loop supply chain (CLSC) with two extensions: first, demand and prices of new and return products are regarded as non-deterministic parameters and second, the objective function is developed from expected profit to three types of mean-risk ones. Indeed, design and planning an integrated CLSC in real-world volatile markets is an important and necessary issue. Further, risk-neutral approaches, which are considered expected values, are not efficient for such uncertain conditions. Hence, this paper, copes with the design and planning problem of a CLSC in a two-stage stochastic structure. Besides, risk criteria are considered through using three types of popular and well-behaved risk measures: mean absolute deviation, value at risk and conditional value at risk (CVaR). Consequently, three types of mean-risk models are developed as objective functions and decision-making procedures are undertaken based on the expected values and risk adversity criteria. Finally, performances of the developed mean-risk models are evaluated in various aspects. Results reveal that the inefficiencies of risk-neutral approaches can be overcome. In addition, in terms of quality of solutions, the acceptability of CVaR is proved when it is compared to other risk measures.     

基于消费者异质性需求的闭环供应链再制造授权模式研究

在消费者异质性需求的市场中,为了探讨最佳的再制造授权模式,基于原始设备制造商(original equipment manufacturer, OEM)与第三方再制造商((third party remanufacturer, TPR)同时进行再制造的闭环供应链(closed loop supply chain, CLSC),采用博弈论分别讨论TPR独立再制造和OEM专利授权再制造(包括单位费用授权和固定费用授权)的CLSC决策模型,对比3种模型的均衡解及最优利润,并分析TPR再制品市场接受度、再制造成本节约对均衡解及企业利润的影响。研究表明,授权增加了OEM利润,故OEM更倾向于对TPR进行授权,并根据固定授权费的大小来决定授权模式;CLSC总利润在固定费用授权模式下最大,且该模式下消费者的购买成本最低;TPR再制品市场接受度及再制造成本节约的增加可提高TPR利润,但会加大对OEM再制品的挤兑程度,最终导致OEM提高授权费来弥补利润损失。     

The boomerang returns? Accounting for the impact of uncertainties on the dynamics of remanufacturing systems

Recent years have witnessed companies abandon traditional open-loop supply chain structures in favour of closed-loop variants, in a bid to mitigate environmental impacts and exploit economic opportunities. Central to the closed-loop paradigm is remanufacturing: the restoration of used products to useful life. While this operational model has huge potential to extend product life-cycles, the collection and recovery processes diminish the effectiveness of existing control mechanisms for open-loop systems. We systematically review the literature in the field of closed-loop supply chain dynamics, which explores the time-varying interactions of material and information flows in the different elements of remanufacturing supply chains. We supplement this with further reviews of what we call the three ‘pillars’ of such systems, i.e. forecasting, collection, and inventory and production control. This provides us with an interdisciplinary lens to investigate how a ‘boomerang’ effect (i.e. sale, consumption, and return processes) impacts on the behaviour of the closed-loop system and to understand how it can be controlled. To facilitate this, we contrast closed-loop supply chain dynamics research to the well-developed research in each pillar; explore how different disciplines have accommodated the supply, process, demand, and control uncertainties; and provide insights for future research on the dynamics of remanufacturing systems.     

Using game theory for analysing pricing models in closed-loop supply chain from short- and long-term perspectives

Closed-loop supply chain (CLSC) management is an environmental approach to supply chain management that aims to prevent hazardous material from entering the nature by means of creating a reverse flow. This paper studies the short- and long-term behaviour of agents in implementing the appropriate collecting strategy in a two-echelon CLSC. In short-term, based on the Stackelberg game, several novel pricing models for different collecting strategies are proposed and compared. Then, the optimal policies of the pricing decisions are determined for each model. The long-term behaviour of companies in implementing collecting process is examined by evolutionary game theory and the most stable strategy is selected. Furthermore, a numerical example is presented to compare the different collecting structures. Finally, a managerial insight is provided to indicate the effect of key parameters such as remanufacturing rate, marketing elasticity and government subsidies on selecting the appropriate strategy.     

政府规制对电器电子产品闭环供应链决策的影响分析

为了分析政府规制对采用不同回收模式的电器电子产品闭环供应链(CLSC)决策的影响,在政府规制和无政府规制两种情形下,分别建立了制造商回收模式、销售商回收模式以及第三方回收企业回收模式的电器电子产品闭环供应链决策模型。通过对比政府规制前后不同回收模式下CLSC各成员的最优决策和收益,发现无论政府规制与否,只要制造商的单位回收成本不是非常高,制造商回收模式都对它自身更有利,否则制造商最好将回收活动外包给销售商。而销售商和第三方回收企业都希望自己从事回收活动。此外,政府规制下销售商回收模式对全社会更有利。     

Remanufactured products purchase intentions and behaviour: Evidence from Malaysia

One of the greatest threats to widespread diffusion of closed-loop supply chain (CLSC) practices in support of consumer goods is the lack of consumer acceptance of remanufactured products. Although the preponderance of extant CLSC research historically focused on product reclamation and remanufacturing practices, consumer acceptance of remanufactured products is now receiving more attention. However, significant gaps in the literature remain to include examining actual consumer behaviour in the presence of alternative offerings. Using theory of planned behaviour and data gathered from Malaysia, this research addresses these gaps by examining how consumer attitude, subjective norms and perceived behavioural control with regard to purchasing remanufactured products affect consumer intention to purchase remanufactured consumer electronic products. Then, actual purchase behaviour is compared with purchase intentions to determine if consumers followed through with their intentions. Findings suggest that consumers are most apt to purchase energy-efficient offerings regardless of their original intentions.