IDEAS home Printed from https://ideas.repec.org/a/gam/jsusta/v13y2021i19p11126-d652011.html
   My bibliography  Save this article

Sustainable Design of a Multi-Echelon Closed Loop Supply Chain under Uncertainty for Durable Products

Author

Listed:
  • Abbas Al-Refaie

    (Department of Industrial Engineering, University of Jordan, Amman 11942, Jordan)

  • Yasmeen Jarrar

    (Department of Industrial Engineering, University of Jordan, Amman 11942, Jordan)

  • Natalija Lepkova

    (Department of Construction Management and Real Estate, Faculty of Civil Engineering, Vilnius Gediminas Technical University, Sauletekio Av. 11, 10223 Vilnius, Lithuania)

Abstract

The increased awareness of environmental sustainability has led to increasing attention to closed loop supply chains (CLSC). The main objective of the CLSC is to capture values from end-of-life (EOL) products in a way that ensures a business to be economically and environmentally sustainable. The challenge is the complexity that occurrs due to closing the loop. At the same time, considering stochastic variables will increase the realism of the obtained results as well as the complexity of the model. This study aims to design a CLSC for durable products using a multistage stochastic model in mixed-integer linear programming (MILP) while considering uncertainty in demand, return rate, and return quality. Demand was described by a normal distribution whereas return rate and return quality were represented by a set of discrete possible outcomes with a specific probability. The objective function was to maximize the profit in a multi-period and multi-echelon CLSC. The multistage stochastic model was tested on a real case study at an air-conditioning company. The computational results identified which facilities should be opened in the reversed loop to optimize profit. The results showed that the CLSC resulted in a reduction in purchasing costs by 52%, an annual savings of 831,150 USD, and extra annual revenue of 5459 USD from selling raw material at a material market. However, the transportation cost increased by an additional annual cost of 6457 USD, and the various recovery processes costs were annually about 152,897 USD. By running the model for nine years, the breakeven point will be after three years of establishing the CLSC and after the annual profit increases by 1.92%. In conclusion, the results of this research provide valuable analysis that may support decision-makers in supply chain planning regarding the feasibility of converting the forward chain to closed loop supply chain for durable products.

Suggested Citation

  • Abbas Al-Refaie & Yasmeen Jarrar & Natalija Lepkova, 2021. "Sustainable Design of a Multi-Echelon Closed Loop Supply Chain under Uncertainty for Durable Products," Sustainability, MDPI, vol. 13(19), pages 1-34, October.
  • Handle: RePEc:gam:jsusta:v:13:y:2021:i:19:p:11126-:d:652011
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/2071-1050/13/19/11126/pdf
    Download Restriction: no

    File URL: https://www.mdpi.com/2071-1050/13/19/11126/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Krikke, H.R. & Bloemhof-Ruwaard, J.M. & Van Wassenhove, L.N., 2001. "Dataset of the Refrigerator Case: design of closed loop supply chains," ERIM Report Series Research in Management ERS-2001-46-LIS, Erasmus Research Institute of Management (ERIM), ERIM is the joint research institute of the Rotterdam School of Management, Erasmus University and the Erasmus School of Economics (ESE) at Erasmus University Rotterdam.
    2. Zahra Homayouni & Mir Saman Pishvaee, 2020. "A robust bi-objective programming approach to environmental closed-loop supply chain network design under uncertainty," International Journal of Mathematics in Operational Research, Inderscience Enterprises Ltd, vol. 16(2), pages 257-278.
    3. Fleischmann, Mortiz & Krikke, Hans Ronald & Dekker, Rommert & Flapper, Simme Douwe P., 2000. "A characterisation of logistics networks for product recovery," Omega, Elsevier, vol. 28(6), pages 653-666, December.
    4. Krikke, H.R. & Bloemhof-Ruwaard, J.M. & Van Wassenhove, L.N., 2001. "Design of Closed Loop Supply Chains," ERIM Report Series Research in Management ERS-2001-45-LIS, Erasmus Research Institute of Management (ERIM), ERIM is the joint research institute of the Rotterdam School of Management, Erasmus University and the Erasmus School of Economics (ESE) at Erasmus University Rotterdam.
    5. Hamed Soleimani & Mirmehdi Seyyed-Esfahani & Mohsen Akbarpour Shirazi, 2016. "A new multi-criteria scenario-based solution approach for stochastic forward/reverse supply chain network design," Annals of Operations Research, Springer, vol. 242(2), pages 399-421, July.
    6. Jeihoonian, Mohammad & Kazemi Zanjani, Masoumeh & Gendreau, Michel, 2016. "Accelerating Benders decomposition for closed-loop supply chain network design: Case of used durable products with different quality levels," European Journal of Operational Research, Elsevier, vol. 251(3), pages 830-845.
    7. Jeihoonian, Mohammad & Kazemi Zanjani, Masoumeh & Gendreau, Michel, 2017. "Closed-loop supply chain network design under uncertain quality status: Case of durable products," International Journal of Production Economics, Elsevier, vol. 183(PB), pages 470-486.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Muneeb, Syed Mohd & Asim, Zainab & Hajiaghaei-Keshteli, Mostafa & Abbas, Haidar, 2023. "A multi-objective integrated supplier selection-production-distribution model for re-furbished products: Towards a circular economy," Renewable and Sustainable Energy Reviews, Elsevier, vol. 175(C).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Van Engeland, Jens & Beliën, Jeroen & De Boeck, Liesje & De Jaeger, Simon, 2020. "Literature review: Strategic network optimization models in waste reverse supply chains," Omega, Elsevier, vol. 91(C).
    2. Abdelkader Sbihi & Richard Eglese, 2010. "Combinatorial optimization and Green Logistics," Annals of Operations Research, Springer, vol. 175(1), pages 159-175, March.
    3. Diabat, Ali & Jebali, Aida, 2021. "Multi-product and multi-period closed loop supply chain network design under take-back legislation," International Journal of Production Economics, Elsevier, vol. 231(C).
    4. Bahman Naderi & Kannan Govindan & Hamed Soleimani, 2020. "A Benders decomposition approach for a real case supply chain network design with capacity acquisition and transporter planning: wheat distribution network," Annals of Operations Research, Springer, vol. 291(1), pages 685-705, August.
    5. Yicong Gao & Shanhe Lou & Hao Zheng & Jianrong Tan, 2023. "A data-driven method of selective disassembly planning at end-of-life under uncertainty," Journal of Intelligent Manufacturing, Springer, vol. 34(2), pages 565-585, February.
    6. Yang Hu, 2023. "Perspectives in closed-loop supply chains network design considering risk and uncertainty factors," Papers 2306.04819, arXiv.org.
    7. Luttiely Santos Oliveira & Ricardo Luiz Machado, 2021. "Application of optimization methods in the closed-loop supply chain: a literature review," Journal of Combinatorial Optimization, Springer, vol. 41(2), pages 357-400, February.
    8. Agrawal, Saurabh & Singh, Rajesh K. & Murtaza, Qasim, 2015. "A literature review and perspectives in reverse logistics," Resources, Conservation & Recycling, Elsevier, vol. 97(C), pages 76-92.
    9. Özceylan, Eren & Paksoy, Turan & Bektaş, Tolga, 2014. "Modeling and optimizing the integrated problem of closed-loop supply chain network design and disassembly line balancing," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 61(C), pages 142-164.
    10. Schweiger, Katharina & Sahamie, Ramin, 2013. "A hybrid Tabu Search approach for the design of a paper recycling network," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 50(C), pages 98-119.
    11. Caiado, Nathália & Guarnieri, Patricia & Xavier, Lúcia Helena & de Lorena Diniz Chaves, Gisele, 2017. "A characterization of the Brazilian market of reverse logistic credits (RLC) and an analogy with the existing carbon credit market," Resources, Conservation & Recycling, Elsevier, vol. 118(C), pages 47-59.
    12. Hongtao Ren & Wenji Zhou & Marek Makowski & Hongbin Yan & Yadong Yu & Tieju Ma, 2021. "Incorporation of life cycle emissions and carbon price uncertainty into the supply chain network management of PVC production," Annals of Operations Research, Springer, vol. 300(2), pages 601-620, May.
    13. Gong, Hailei & Zhang, Zhi-Hai, 2022. "Benders decomposition for the distributionally robust optimization of pricing and reverse logistics network design in remanufacturing systems," European Journal of Operational Research, Elsevier, vol. 297(2), pages 496-510.
    14. De Giovanni, Pietro & Zaccour, Georges, 2014. "A two-period game of a closed-loop supply chain," European Journal of Operational Research, Elsevier, vol. 232(1), pages 22-40.
    15. Zhang, Abraham & Wang, Jason X. & Farooque, Muhammad & Wang, Yulan & Choi, Tsan-Ming, 2021. "Multi-dimensional circular supply chain management: A comparative review of the state-of-the-art practices and research," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 155(C).
    16. Mehmet Talha Dulman & Surendra M. Gupta, 2018. "Evaluation of Maintenance and EOL Operation Performance of Sensor-Embedded Laptops," Logistics, MDPI, vol. 2(1), pages 1-22, January.
    17. de la Fuente, M. Victoria & Ros, Lorenzo & Cardos, Manuel, 2008. "Integrating Forward and Reverse Supply Chains: Application to a metal-mechanic company," International Journal of Production Economics, Elsevier, vol. 111(2), pages 782-792, February.
    18. Hong, I-Hsuan & Ammons, Jane C. & Realff, Matthew J., 2008. "Decentralized decision-making and protocol design for recycled material flows," International Journal of Production Economics, Elsevier, vol. 116(2), pages 325-337, December.
    19. Pazoki, Mostafa & Samarghandi, Hamed, 2020. "Take-back regulation: Remanufacturing or Eco-design?," International Journal of Production Economics, Elsevier, vol. 227(C).
    20. Ebrahimi Bajgani, Sahar & Saberi, Sara & Toyasaki, Fuminori, 2023. "Designing a reverse supply chain network with quality control for returned products: Strategies to mitigate free-riding effect and ensure compliance with technology licensing requirements," Technological Forecasting and Social Change, Elsevier, vol. 195(C).

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gam:jsusta:v:13:y:2021:i:19:p:11126-:d:652011. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.