Abstract
The major challenge faced by all the supply chains currently is to reduce supply chain (SC) costs while maintaining the flow of the items and reducing the pressure on the environment. Production of new items requires a significant amount of raw material and energy, which adds to the pressure on nature. In order to save natural resources, reusing, reworking, remanufacturing, and recycling are good alternatives. The present study is focused on developing a resource-efficient rework and remanufacturing model. For efficient control of inventory, the three layers of SC are considered to have a forward supply chain, closed-loop supply chain, and reverse supply chain. The three layers are linked with a collection centre. The collection centre holds the stock of returned items and bifurcates them into minor and major defectives. The minor defectives are sent to the rework plant, where they are reworked and made as-good-as new. The major defective items are sent to the scrap dealer. Thus, scrap dealer bifurcates them into remanufacturable and salvage items. The remanufacturable items are sent to the secondary manufacturer for the secondary product. Using analytical optimization technique, the minimal cost of the system is achieved with the optimal planning horizon. Lingo and Mathematica software are used to find out the optimal solution of the developed model. Also, sensitivity analysis is performed based on several parameters to see how parameters are robust to the objective function.
Similar content being viewed by others
Availability of data and materials
The authors confirm that the data supporting the findings of this study are available within the article. Derived data supporting the findings of this study are available from the corresponding author [ckjaggi@yahoo.com] on request.
Abbreviations
- SC:
-
Supply chain
- CLSC:
-
Closed-loop supply chain
- FSC:
-
Forward supply chain
- RSC:
-
Reverse supply chain
- GSC:
-
Green supply chain
- EOQ:
-
Economic order quantity
- EPQ:
-
Economic production quantity
- TC1 :
-
Total cost for case I
- TC2 :
-
Total cost for case II
- ETC1 :
-
Expected total cost for case I
- ETC2 :
-
Expected total cost for case II
- ETC1U:
-
Expected total cost for case I (per unit time)
- ETC2U:
-
Expected total cost for case II (per unit time)
- PDF:
-
Probability density function
References:
Abbey JD, Meloy MG, Guide VDR, Atalay S (2014) Remanufactured products in closed-loop supply chains for consumer goods. Prod Oper Manag 24(3):488–503. https://doi.org/10.1111/poms.12238
Abdallah T, Diabat A, Simchi-Levi D (2011) Sustainable supply chain design: a closed-loop formulation and sensitivity analysis. Prod Plan Control 23(2–3):120–133. https://doi.org/10.1080/09537287.2011.591622
Agrawal S, Singh RK, Murtaza Q (2015) A literature review and perspectives in reverse logistics. Resour Conserv Recycl 97:76–92. https://doi.org/10.1016/j.resconrec.2015.02.009
Bazan E, Jaber MY, El Saadany AMA (2015) Carbon emissions and energy effects on manufacturing–remanufacturing inventory models. Comput Ind Eng 88:307–316. https://doi.org/10.1016/j.cie.2015.07.002
Bazan E, Jaber MY, Zanoni S (2016) A review of mathematical inventory models for reverse logistics and the future of its modeling: an environmental perspective. Appl Math Model 40(5–6):4151–4178. https://doi.org/10.1016/j.apm.2015.11.027
Ben-Daya M, Asad R, Nabi KA (2019) A single-vendor multi-buyer production remanufacturing inventory system under a centralized consignment arrangement. Comput Ind Eng 135:10–27. https://doi.org/10.1016/j.cie.2019.05.032
Benkherouf L, Skouri K, Konstantaras I (2014) Optimal lot sizing for a production-recovery system with time-varying demand over a finite planning horizon. IMA J Manag Math 25(4):403–420. https://doi.org/10.1093/imaman/dpt015
Chung S-L, Wee H-M, Yang P-C (2008) Optimal policy for a closed-loop supply chain inventory system with remanufacturing. Math Comput Model 48(5–6):867–881. https://doi.org/10.1016/j.mcm.2007.11.014
Condeixa LD, Silva P, Moah D, Farias B, Leiras A (2022) Evaluating cost impacts on reverse logistics using an economic order quantity (EOQ) model with environmental and social considerations. CEJOR 30(3):921–940. https://doi.org/10.1007/s10100-020-00707-4
Daaboul J, Le Duigou J, Penciuc D, Eynard B (2016) An integrated closed-loop product lifecycle management approach for reverse logistics design. Prod Plan Control 27(13):1062–1077. https://doi.org/10.1080/09537287.2016.1177234
Dai R, Zhang J, Tang W (2017) Cartelization or cost-sharing? Comparison of cooperation modes in a green supply chain. J Clean Prod 156:159–173. https://doi.org/10.1016/j.jclepro.2017.04.011
Dobos I, Richter K (2004) An extended production/recycling model with stationary demand and return rates. Int J Prod Econ 90(3):311–323. https://doi.org/10.1016/j.ijpe.2003.09.007
Dobos I, Richter K (2006) A production/recycling model with quality consideration. Int J Prod Econ 104(2):571–579. https://doi.org/10.1016/j.ijpe.2005.09.006
Download free icons, music, stock photos, vectors. (2019). Icons8.com. https://icons8.com/
Dwicahyani AR, Jauhari WA, Rosyidi CN, Laksono PW (2017) Inventory decisions in a two-echelon system with remanufacturing, carbon emission, and energy effects. Cogent Eng. https://doi.org/10.1080/23311916.2017.1379628
El Saadany AMA, Jaber MY (2010) A production/remanufacturing inventory model with price and quality dependant return rate. Comput Ind Eng 58(3):352–362. https://doi.org/10.1016/j.cie.2009.01.017
Fleischmann M, Bloemhof-Ruwaard JM, Dekker R, van der Laan E, van Nunen JAEE, Van Wassenhove LN (1997) Quantitative models for reverse logistics: a review. Eur J Oper Res 103(1):1–17. https://doi.org/10.1016/s0377-2217(97)00230-0
Gao J, Han H, Hou L, Wang H (2016) Pricing and effort decisions in a closed-loop supply chain under different channel power structures. J Clean Prod 112:2043–2057. https://doi.org/10.1016/j.jclepro.2015.01.066
Gautam P, Maheshwari S, Kausar A, Jaggi CK (2021) Inventory models for imperfect quality items: a two-decade review. Adv Interdiscip Res Eng Bus Manag. https://doi.org/10.1007/978-981-16-0037-1_16
Ghosh D, Shah J (2015) Supply chain analysis under green sensitive consumer demand and cost sharing contract. Int J Prod Econ 164:319–329. https://doi.org/10.1016/j.ijpe.2014.11.005
Giri BC, Sharma S (2015) Optimizing a closed-loop supply chain with manufacturing defects and quality dependent return rate. J Manuf Syst 35:92–111. https://doi.org/10.1016/j.jmsy.2014.11.014
Giri BC, Mondal C, Maiti T (2018) Analysing a closed-loop supply chain with selling price, warranty period and green sensitive consumer demand under revenue sharing contract. J Clean Prod 190:822–837. https://doi.org/10.1016/j.jclepro.2018.04.092
Giutini R, Gaudette K (2003) Remanufacturing: the next great opportunity for boosting US productivity. Bus Horizons 46(6):41–48
Glock CH, Grosse EH (2021) The impact of controllable production rates on the performance of inventory systems: a systematic review of the literature. Eur J Oper Res 288(3):703–720. https://doi.org/10.1016/j.ejor.2020.05.033
Govindan K, Soleimani H, Kannan D (2015) Reverse logistics and closed-loop supply chain: a comprehensive review to explore the future. Eur J Oper Res 240(3):603–626. https://doi.org/10.1016/j.ejor.2014.07.012
Guide VDR, Van Wassenhove LN (2009) OR FORUM—the evolution of closed-loop supply chain research. Oper Res 57(1):10–18. https://doi.org/10.1287/opre.1080.0628
Guide VDR, Harrison TP, Van Wassenhove LN (2003) The challenge of closed-loop supply chains. Interfaces 33(6):3–6. https://doi.org/10.1287/inte.33.6.3.25182
Hasanov P, Jaber MY, Zolfaghari S (2012) Production, remanufacturing and waste disposal models for the cases of pure and partial backordering. Appl Math Model 36(11):5249–5261. https://doi.org/10.1016/j.apm.2011.11.066
Iqbal MW, Kang Y, Jeon HW (2020) Zero waste strategy for green supply chain management with minimization of energy consumption. J Clean Prod 245:118827. https://doi.org/10.1016/j.jclepro.2019.118827
Islam MT, Huda N (2018) Reverse logistics and closed-loop supply chain of waste electrical and electronic equipment (WEEE)/E-waste: a comprehensive literature review. Resour Conserv Recycl 137:48–75. https://doi.org/10.1016/j.resconrec.2018.05.026
Jaber MY, El Saadany AMA (2009) The production, remanufacture and waste disposal model with lost sales. Int J Prod Econ 120(1):115–124. https://doi.org/10.1016/j.ijpe.2008.07.016
Kazemi N, Modak NM, Govindan K (2018) A review of reverse logistics and closed loop supply chain management studies published in IJPR: a bibliometric and content analysis. Int J Prod Res 57(15–16):4937–4960. https://doi.org/10.1080/00207543.2018.1471244
Koh S-G, Hwang H, Sohn K-I, Ko C-S (2002) An optimal ordering and recovery policy for reusable items. Comput Ind Eng 43(1–2):59–73. https://doi.org/10.1016/s0360-8352(02)00062-1
Konstantaras I, Skouri K (2010) Lot sizing for a single product recovery system with variable setup numbers. Eur J Oper Res 203(2):326–335. https://doi.org/10.1016/j.ejor.2009.07.018
Laguir I, Stekelorum R, El Baz J (2020) Going green? Investigating the relationships between proactive environmental strategy, GSCM practices and performances of third-party logistics providers (TPLs). Prod Plan Control 32(13):1049–1062. https://doi.org/10.1080/09537287.2020.1784483
Mabini MC, Pintelon LM, Gelders LF (1992) EOQ type formulations for controlling repairable inventories. Int J Prod Econ 28(1):21–33. https://doi.org/10.1016/0925-5273(92)90110-s
Maiti T, Giri BC (2017) Two-way product recovery in a closed-loop supply chain with variable markup under price and quality dependent demand. Int J Prod Econ 183:259–272. https://doi.org/10.1016/j.ijpe.2016.09.025
Mawandiya BK, Jha JK, Thakkar J (2017) Production-inventory model for two-echelon closed-loop supply chain with finite manufacturing and remanufacturing rates. Int J Syst Sci Oper Logist 4(3):199–218. https://doi.org/10.1080/23302674.2015.1121303
Mishra JL, Hopkinson PG, Tidridge G (2018) Value creation from circular economy-led closed loop supply chains: a case study of fast-moving consumer goods. Prod Plan Control 29(6):509–521. https://doi.org/10.1080/09537287.2018.1449245
Munyaka J-CB, Yadavalli SV (2022) Inventory management concepts and implementations: a systematic review. S Afr J Ind Eng 32(2):15–36. https://doi.org/10.7166/33-2-2527
Nahmiasj S, Rivera H (1979) A deterministic model for a repairable item inventory system with a finite repair rate†. Int J Prod Res 17(3):215–221. https://doi.org/10.1080/00207547908919609
Özceylan E, Paksoy T, Bektaş T (2014) Modeling and optimizing the integrated problem of closed-loop supply chain network design and disassembly line balancing. Transport Res Part E Logist Transport Rev 61:142–164. https://doi.org/10.1016/j.tre.2013.11.001
Peng H, Shen N, Liao H, Xue H, Wang Q (2020) Uncertainty factors, methods, and solutions of closed-loop supply chain—a review for current situation and future prospects. J Clean Prod 254:120032. https://doi.org/10.1016/j.jclepro.2020.120032
Richter K (1996a) The extended EOQ repair and waste disposal model. Int J Prod Econ 45(1–3):443–447. https://doi.org/10.1016/0925-5273(95)00143-3
Richter K (1996b) The EOQ repair and waste disposal model with variable setup numbers. Eur J Oper Res 95(2):313–324. https://doi.org/10.1016/0377-2217(95)00276-6
Richter K (1997) Pure and mixed strategies for the EOQ repair and waste disposal problem. Or Spektrum 19(2):123–129. https://doi.org/10.1007/bf01545511
Richter K, Dobos I (1999) Analysis of the EOQ repair and waste disposal problem with integer setup numbers. Int J Prod Econ 59(1–3):463–467. https://doi.org/10.1016/s0925-5273(98)00110-8
Rogers DS, Tibben-Lembke RS (1998) Going backwards: reverse logistics trends and practices. Reverse Logistics Executive Council, Pittsburgh. https://www.icesi.edu.co/blogs/gestionresiduossolidos/files/2008/11/libro-lr.pdf
Ross SM, Kelly JJ, Sullivan RJ, Perry WJ, Mercer D, Davis RM (1996) Stochastic processes, vol 2. Wiley, New York
Sabbaghnia A, Taleizadeh AA (2021) Quality, buyback and technology licensing considerations in a two-period manufacturing–remanufacturing system: a closed-loop and sustainable supply chain. Int J Syst Sci Oper Logist 8(2):1–18. https://doi.org/10.1080/23302674.2020.1716095
Savaskan RC, Van Wassenhove LN (2006) Reverse channel design: the case of competing retailers. Manag Sci 52(1):1–14. https://doi.org/10.1287/mnsc.1050.0454
Savaskan RC, Bhattacharya S, Van Wassenhove LN (2004) Closed-loop supply chain models with product remanufacturing. Manag Sci 50(2):239–252. https://doi.org/10.1287/mnsc.1030.0186
Schrady DA (1967) A deterministic inventory model for reparable items. Naval Res Logist Quart 14(3):391–398. https://doi.org/10.1002/nav.3800140310
Singh M (2018) The costly journey of returned goods means big business for some. CNBC; CNBC. https://www.cnbc.com/2018/12/13/returned-goods-are-a-problem-for-retailers-resellers-are-cashing-in.html
Taleizadeh AA, Moshtagh MS, Moon I (2018) Pricing, product quality, and collection optimization in a decentralized closed-loop supply chain with different channel structures: game theoretical approach. J Clean Prod 189:406–431. https://doi.org/10.1016/j.jclepro.2018.02.209
Taleizadeh AA, Sane-Zerang E, Choi T-M (2016) The effect of marketing effort on dual-channel closed-loop supply chain systems. IEEE Trans Syst Man Cybern Syst 48(2):265–276. https://doi.org/10.1109/tsmc.2016.2594808
Teng H-M, Hsu P-H, Chiu Y, Wee HM (2011) Optimal ordering decisions with returns and excess inventory. Appl Math Comput 217(22):9009–9018. https://doi.org/10.1016/j.amc.2011.03.107
Teunter RH (2001) Economic ordering quantities for recoverable item inventory systems. Nav Res Logist 48(6):484–495. https://doi.org/10.1002/nav.1030
Teunter R (2004) Lot-sizing for inventory systems with product recovery. Comput Ind Eng 46(3):431–441. https://doi.org/10.1016/j.cie.2004.01.006
Trebilcock B (2002) Return to sender. Warehous Manag 9(4):24–27
Van Engeland J, Beliën J, De Boeck L, De Jaeger S (2020) Literature review: strategic network optimization models in waste reverse supply chains. Omega 91:102012. https://doi.org/10.1016/j.omega.2018.12.001
Acknowledgements
The authors show their sincere appreciation to the editor and anonymous reviewers for their insightful feedback in significantly shaping the manuscript.
Funding
This research received no specific grant from any funding agency in the public, commercial, or not-for-profit sectors.
Author information
Authors and Affiliations
Corresponding author
Ethics declarations
Conflict of interest
No potential conflict of interest was reported by the author(s).
Research involving human participants and/or animals
There is no involvement of human participation and/or animals.
Informed consent
All authors have approved the manuscript and agree with its submission to the Journal for publication.
Additional information
Publisher's Note
Springer Nature remains neutral with regard to jurisdictional claims in published maps and institutional affiliations.
Rights and permissions
Springer Nature or its licensor (e.g. a society or other partner) holds exclusive rights to this article under a publishing agreement with the author(s) or other rightsholder(s); author self-archiving of the accepted manuscript version of this article is solely governed by the terms of such publishing agreement and applicable law.
About this article
Cite this article
Maheshwari, S., Kausar, A., Hasan, A. et al. Sustainable inventory model for a three-layer supply chain using optimal waste management. Int J Syst Assur Eng Manag 14 (Suppl 1), 216–235 (2023). https://doi.org/10.1007/s13198-022-01839-3
Received:
Revised:
Accepted:
Published:
Issue Date:
DOI: https://doi.org/10.1007/s13198-022-01839-3