A joint economic lot-size model for sustainable industries of recycled content products

M. Parsa (Corresponding author), Ali Shahandeh Nookabadi, Zümbül Atan

Research output: Contribution to journalArticleAcademicpeer-review

Abstract

Coupling forward and reverse operations in closed-loop supply chains (CLSCs) can lead to a higher degree of sustainability. Previous studies on CLSCs have focused on the products that are either purely remanufactured or purely new. The emphasis on recycling necessitates research that considers recycled content products, which are made from a mix of virgin and recycled material. We study a CLSC consisting of a manufacturer, a retailer, a supplier, a material recovery facility (MRF) and a recycling facility. The supplier and the recycling facility provide the virgin and recycled raw materials, respectively, to the manufacturer who mixes them based on a predefined proportion known as the recycled content level to produce the finished products for the retailer. The recycling facility recovers the manufacturer’s production waste as well as the used products collected by the MRF. We aim at maximising the chain-wide profit by optimising the shipments among the supply chain parties. We propose a Branch-and-Bound algorithm to obtain the optimal solution, and a heuristic procedure, which provides the optimal solution in 96% of all tested instances. In addition, we prove the optimality of a bang-bang policy for the recycled content level in most cases.

Original languageEnglish
Pages (from-to)7439-7470
JournalInternational Journal of Production Research
Volume58
Issue number24
DOIs
Publication statusPublished - 16 Dec 2020

Keywords

  • Sustainability
  • closed-loop supply chains
  • joint economic lot-sizing problem
  • multi-echelon inventory
  • recycled content products

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