Concurrent product and closed-loop supply chain design with an application to refrigerators

TLDR

Environmental concerns have spurred the development of techniques that integrate product and supply‑chain design to achieve both economic and ecological feasibility, yet most existing models address product design and logistics separately. This study develops quantitative models to support decision‑making on the design structure of both products and logistics. The model captures modularity, reparability, recyclability, linear‑energy and waste environmental impacts, and linear volume‑based economic costs with fixed set‑up components, and is applied to a closed‑loop refrigerator supply chain using real R&D data, evaluated under scenarios of centralized versus decentralized processing, alternative product designs, varying return quality and quantity, and potential producer‑responsibility legislation.

Abstract

Increased concern for the environment has lead to new techniques to design products and supply chains that are both economically and ecologically feasible. A literature study shows that many models exist to support product design and logistics separately. In our research, we develop quantitative modelling to support decision-making concerning both the design structure of a product, i.e. modularity, reparability and recyclability, and the design structure of the logistic network. Environmental impacts are measured by linear-energy and waste functions. Economic costs are modelled as linear functions of volumes with a fixed set-up component for facilities. This model is applied to a closed-loop supply chain design problem for refrigerators using real life R&D data of a Japanese consumer electronics company concerning its European operations. The model is run for different scenarios using different parameter settings such as centralized versus decentralized processing, alternative product designs, varying return quality and quantity, and potential environmental legislation based on producer responsibility.