A study on closed-loop supply chain model for parts reuse with economic efficiency

This study proposes a basic model for closed-loop supply chains which includes not only traditional forward supply chains for the generation of products but also reverse supply chains for the reuse and recycling of products in consideration of economic efficiency for make-to-order and remanufacturing-to-order companies. The basic model consists of four model components, i.e., clients, manufacturers, suppliers, and remanufacturers. A remanufacturer is added to the previous model of forward supply chains in this study as a new model component which collects used products from clients and provides reusable parts to manufacturers in consideration of the demand of products. Remanufacturers as well as manufacturers and suppliers modify their schedules and negotiate with each other in order to determine suitable prices and delivery times of products. Remanufacturers stimulate clients to discard used products to meet the demand of reusable parts. They can increase the amount of reused products and reduce wastes by creating a balance between supply and demand of reusable parts. A prototype of a simulation system for closed-loop supply chains is developed in order to evaluate the effectiveness of the proposed model and negotiation protocol. Experimental results of the proposed model are compared with the ones of a conventional model which discards the used products without negotiation processes between remanufacturers and clients. Experimental results show that the proposed model can reuse more products than the conventional model.