Designing Closed-loop Supply Chain Network Based On Multiple Recovery Models

In recent years, the increasingly serious environmental problems and governments’ continuing to strengthen the regulation of corporate environmental responsibility, low carbon concept is gradually getting more and more people’s attention. Meanwhile, the reverse logistics and closed-loop supply chain management are also getting more and more attention from enterprises and academics. New problems are emerged under the new background: whether recycling activities is economic, whether there are differences between quality of remanufacturing product and new product, how to optimize the multiple objectives of the closed-loop supply chain under a variety of recycling channels. In order to study the above problems and the influence of recycling pattern on closed-loop supply chain, the game theory, supply chain management, mixed integer programming and multi-objective optimization theory were used to analyze the recycling pattern of the closed-loop supply chain.First and foremost, taking advantage of game theory, several single recovery modes are analyzed. Considering ecological benefits (including benefits of three aspects:economy, environment and society) as the decision criterion, a secondary closed-loop supply chain model, composed of a single manufacturer and two retailers, is set up. The three recovery patterns under the condition of the remanufacturing activities being economic and uneconomic are compared. The model is extended by considering the factors such as consumer surplus and social welfare. The findings indicate that the cost of remanufacturing activities saved has a significant effect on the profit and social welfare of the supply chain system. Besides, considering the product quality differentiation, several hybrid recovery modes in the closed loop supply chain are established and the recovery task is undertaken by manufacturers and retailers, manufacturers and the third-party recyclers, retailers and the third-party recyclers respectively. And the effects of the remanufacturing product quality on the choice of recovery channel in closed loop supply chain are also analyzed. The optimal product quality, product retail price and profits of the related recyclers are obtained by analyzing respectively. Then, the contrast of the three kinds of hybrid recovery modes is also analyzed. Last, a closed loop supply chain is established using the result of research above. Economic cost and environment cost are considered comprehensively, and a concave function is used to model the relationship between CO2 emissions and vehicle weight. In order to solve this NP-hard problem, an improved version of the augmented e-constraint method is applied and the popular commercial optimization suite IBM ILOG CPLEX is adopted for optimization purpose to gain the Pareto front. To test the efficiency and effectiveness of the algorithm, a real case study is used to demonstrate the applicability of the approach. The sensitivity analysis on some parameters in the model shows how the Pareto front reacts to changes in some parameters and meanwhile gives decision makers some suggestions.