 A unified theory of the dynamics of closed-loop supply chainsTakamichi Hosoda and Stephen M. Disney European Journal of Operational Research, 2018, vol. 269, issue 1, 313-326 Abstract: We investigate the dynamics of a closed-loop supply chain with first-order auto-regressive (AR(1)) demand and return processes. We assume these two processes are cross-correlated. The remanufacturing process is subject to a random triage yield. Remanufactured products are considered as-good-as-new and used to partially satisfy market demand; newly manufactured products make up the remainder. We derive the optimal linear policy in our closed-loop supply chain setting to minimise the manufacturer’s inventory costs. We show that the lead-time paradox can emerge in many cases. In particular, the auto- and cross-correlation parameters and variances of the error terms in the demand and the returns, as well as the remanufacturing lead time, all influence the existence of the lead-time paradox. Finally, we propose managerial recommendations for manufacturers. Keywords: Supply chain management; Closed-loop supply chain; Vector auto-regressive process; Order-up-to policy; Random yield (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:ejores:v:269:y:2018:i:1:p:313-326 DOI: 10.1016/j.ejor.2017.07.020 Access Statistics for this article European Journal of Operational Research is currently edited by Roman Slowinski, Jesus Artalejo, Jean-Charles. Billaut, Robert Dyson and Lorenzo Peccati More articles in European Journal of Operational Research from Elsevier |
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