Design of Closed Loop Supply Chains

38 Pages Posted: 20 Feb 2003

See all articles by H. R. Krikke

H. R. Krikke

Tilburg University - Center and Faculty of Economics and Business Administration

Jacqueline M. Bloemhof-Ruwaard

Erasmus University Rotterdam (EUR) - Department of Technology and Operations Management; Erasmus Research Institute of Management (ERIM); Erasmus University Rotterdam (EUR) - Rotterdam School of Management (RSM)

Luk N. Van Wassenhove

INSEAD

Date Written: August 9, 2001

Abstract

Increased concern for the environment has lead to new techniques to design products and supply chains that are both economically and ecologically feasible. This paper deals with the product - and corresponding supply chain design for a refrigerator. Literature study shows that there are many models to support product design and logistics separately, but not in an integrated way. In our research we develop quantitative modelling to support an optimal design structure of a product, i.e. modularity, repairability, recyclability, as well as the optimal locations and goods flows allocation in the logistics system. Environmental impacts are measured by energy and waste. Economic costs are modelled as linear functions of volumes with a fixed set-up component for facilities. We apply this model using real life R&D data of a Japanese consumer electronics company. The model is run for different scenarios using different parameter settings such as centralised versus decentralised logistics, alternative product designs, varying return quality and quantity, and potential environmental legislation based on producer responsibility.

Keywords: supply chain management, product design, network design, facility location, reverse logistics

JEL Classification: M, M11, R4

Suggested Citation

Krikke, H. R. R. and Bloemhof-Ruwaard, Jacqueline M. and Van Wassenhove, Luk N., Design of Closed Loop Supply Chains (August 9, 2001). ERIM Report Series Reference No. ERS-2001-45-LIS. Available at SSRN: https://ssrn.com/abstract=370902

H. R. R. Krikke (Contact Author)

Tilburg University - Center and Faculty of Economics and Business Administration ( email )

P.O. Box 90153
Tilburg, 5000 LE
Netherlands

Jacqueline M. Bloemhof-Ruwaard

Erasmus University Rotterdam (EUR) - Department of Technology and Operations Management ( email )

RSM Erasmus University
PO Box 1738
3000 DR Rotterdam
Netherlands

Erasmus Research Institute of Management (ERIM)

P.O. Box 1738
3000 DR Rotterdam
Netherlands

Erasmus University Rotterdam (EUR) - Rotterdam School of Management (RSM) ( email )

P.O. Box 1738
Room T08-21
3000 DR Rotterdam, 3000 DR
Netherlands

Luk N. Van Wassenhove

INSEAD ( email )

Boulevard de Constance
77 305 Fontainebleau Cedex
France
(33) (0)1 60 72 42 66 (Phone)
(33) (0)1 60 72 40 49 (Fax)

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