Division of Information Technology, Engineering and the Environment
School of Advanced Manufacturing and Mechanical Engineering
School of Advanced Manufacturing and Mechanical Engineering
Thesis Abstract
Closed-loop supply chains (CLSC) will open up a new and interesting set of issues to be addressed by industry. There are many reasons for the growing interest in closed-loop supply chains (CLSC). The most prominent reasons are the growing concern for the environment and cost reduction. Next to environment, consumers demand for clean manufacturing, remanufacturing and recycling. Hence, customers and retailers expect original equipment manufacturers to set up a proper closed-loop supply system and expect the returned products to be processed and recovered in an environmentally responsible way.
A well-managed closed-loop supply chains (CLSC) can provide important cost savings in procurement, disposal, inventory carrying and transportation. Therefore, inventory policy is playing an important role in setting up efficient closed-loop supply chains (CLSC) especially in recognising product returns as supply source and integrates into the material management. Product returns may represent a valuable resource that allows for production cost savings or additional revenues. The fact that product returns are more uncertain than demands in terms of quantity, quality and timing makes inventory control more difficult than without returns.
This research proposes how to integrated production and inventory policy in a multi-echelon closed-loop supply chains system. In this system, supplier supply raw materials to a manufacturer which manufactures and assembles raw materials into finished products. Then, the finished products are delivered to distributor distributing them to retailers. A recovery centre will collect the used finished products from end customers and dissemble them into parts. Reusable parts will be returned to the system to be manufactured and assembled again into the finished products. This research aims to optimise the inventory policy for the whole closed-loop supply chain system over a finite planning horizon.
The problem model considers some constraints of the players that are recovery centre’s delivery cycle and production shortage level. The model is stated as the optimization problem which is solved by a mixed integer non-linear programming method.
