Design of Closed Loop Supply Chain Networks

Subramanian Pazhani and A. Ravi Ravindran
Additional contact information
Subramanian Pazhani: Harold and Inge Marcus Department of Industrial & Manufacturing Engineering, Pennsylvania State University, State College, PA, USA
A. Ravi Ravindran: Harold and Inge Marcus Department of Industrial & Manufacturing Engineering, Pennsylvania State University, State College, PA, USA

International Journal of Business Analytics (IJBAN), 2014, vol. 1, issue 1, 43-66

Abstract: Given the importance of operating and managing forward and reverse supply chains in an integrated manner, this article considers an integrated four-stage supply chain network with forward and reverse product flows. We consider a closed loop supply chain (CLSC) network with primarily commercial returns, which could be potentially recovered by light repair operations or by refurbishing. The annual estimate of commercial returns in the United States is in excess of $100 billion. This paper discusses the optimal design of a CLSC network.A mixed integer linear programming (MILP) model is developed to determine the optimal locations of the facilities and the distribution of flows between facilities in the CLSC to maximize the total profit. The model is illustrated using a realistic example applicable to the electronics industries. Even though recycling and refurbishing add cost, the overall supply chain profit increases due to a reduction in the raw material cost. Sensitivity analysis is carried out to determine the effect of return percentage and varying demands of customers who are willing to buy refurbished products. The analysis show that the total supply chain profit increases with the increase in refurbishing activity. Finally, changes in the network design with respect to the uncertainty in these return parameters are also studied. The results show that the changes in return parameters lead to changes in optimal network design implying the need to explicitly consider the uncertainty in these return parameters.

Date: 2014
References: Add references at CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://services.igi-global.com/resolvedoi/resolve. ... 018/ijban.2014010104 (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:igg:jban00:v:1:y:2014:i:1:p:43-66

Access Statistics for this article

International Journal of Business Analytics (IJBAN) is currently edited by John Wang

More articles in International Journal of Business Analytics (IJBAN) from IGI Global
Bibliographic data for series maintained by Journal Editor ().