Copper Closed-Loop Supply Chain Network Design Based on a Two-Stage Stochastic Programming Model Considering Uncertain Market Prices

Mou Shen, Ying Guo, Hui Gao and Hongtao Ren ()
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Mou Shen: School of Business, East China University of Science and Technology, Meilong Road 130, Shanghai 200237, China
Ying Guo: School of Energy Science and Engineering, Central South University, Lushan South Road 932, Changsha 410083, China
Hui Gao: Economics and Technology Research Institute, China National Petroleum Corporation, Beijing 100724, China
Hongtao Ren: School of Business, East China University of Science and Technology, Meilong Road 130, Shanghai 200237, China

Sustainability, 2025, vol. 17, issue 20, 1-21

Abstract: Copper is a critically important metal for economic security, and its supply chain is influenced by various factors, particularly market prices. This paper aims to uncover the impact of high uncertainty in copper prices on the copper supply chain (CSC) configuration and propose strategies for CSC construction. To achieve this goal, this study presents a closed-loop supply chain (CLSC) network, simulates copper market volatility using the geometric Brownian motion (GBM) model, and establishes a two-stage stochastic programming (TSSP) model. An empirical study was conducted using geographical and economic data of the CSC in the Chinese province of Hunan. The research results indicate that there is a threshold in copper prices that can lead to the construction of a reverse supply chain (RSC). However, significant fluctuations in copper prices introduce uncertainty into the supply chain network configuration. Therefore, policy measures to encourage copper scrap recycling should be implemented to maintain the safety of the CLSC during market instability. The proposed modelling framework for addressing fluctuation factors in supply chain design has been validated and can be promoted to other similar industries affected by markets.

Keywords: copper; closed-loop supply chain (CLSC); stochastic programming; uncertainty; optimization (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2025
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