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Dynamics of closed loop supply chains

Hosoda, Takamichi, Disney, Stephen Michael and Gavirneni, Nagesh 2015. Dynamics of closed loop supply chains. Presented at: 5th International Conference on Industrial Engineering and Operations Management, Dudai, United Arab Emirates, 3 –5 March 2015.

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We investigate the dynamics of a closed loop supply chain (CLSC) consisting of a manufacturer and a remanufacturer. The market demands and the product returns are stochastic and are correlated with each other. The used products are converted into “as-good-as-new” products and used, together with new products, to satisfy the market demand. The remanufacturing process takes time and is subject to a random yield. Remanufactured products are pushed into the manufacturer’s inventory. It is assumed that the manufacturer exploits the order-up-to policy to determine its brand-new production quantity. We compute the benefit of the manufacturer obtaining advance notice of the product return quantities from the remanufacturer and demonstrate that the lead times, random yields and parameters describing the returns play a significant role. The interesting and counter-intuitive result is that increasing the lead time at the remanufacturer can increase the benefit. It is also shown that Bullwhip is generated even if both the demand and the return processes are a white noise process. Analytical results suggest that there is a fundamental underlying trade-off in a CLSC, which could be a barrier against the spread of CLSC.

Item Type: Conference or Workshop Item (Speech)
Date Type: Completion
Status: Unpublished
Schools: Centre for Advanced Manufacturing Systems At Cardiff (CAMSAC)
Business (Including Economics)
Subjects: H Social Sciences > HD Industries. Land use. Labor > HD28 Management. Industrial Management
Last Modified: 03 Mar 2020 02:37

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