Simulation Study of an Integrated Reverse Logistics in Fuzzy Environment
Along with forward supply chain organization needs to consider the impact of reverse logistics due to its economic advantage, social awareness and strict legislations. In this work, we develop a system dynamics framework to analyze the long-term behavior
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Abstract Along with forward supply chain organization needs to consider the impact of reverse logistics due to its economic advantage, social awareness and strict legislations. In this work, we develop a system dynamics framework to analyze the long-term behavior of a multi-echelon integrated forward-reverse supply chain with fuzzy demand, satisfaction rate and collection rate. The uncertainty associated with satisfaction of customers and collection of used product has been quantified using fuzzy possibility measures. In the proposed model, it is assumed that the customer can exchange their old used product with a fresh new product in a primary market or a relatively better refurbished product in a secondary market at a discounted price. From the simulation study, it is observed that the inclusion of product exchange policy reduce the order variation and bullwhip effect at both retailer and distributor level. Finally, sensitivity analysis is performed to examine the impact of various parameters, namely; satisfaction rate, collection percentage, refurbishing percentage, inventory cover time and inventory adjustment time on recovery process and bullwhip effect.
Keywords Bullwhip effect Fuzzy parameters supply chain Simulation System dynamics
Possibility measures Reverse
D. Das P. Dutta (&) SJM School of Management, Indian Institute of Technology Bombay, Mumbai 400076, India e-mail: [email protected]
G.-C. Yang et al. (eds.), IAENG Transactions on Engineering Technologies, Lecture Notes in Electrical Engineering 186, DOI: 10.1007/978-94-007-5651-9_11, Ó Springer Science+Business Media Dordrecht 2013
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D. Das and P. Dutta
1 Introduction A large number of successful companies, especially in emerging economies, focus on forward supply chain but experience a lack of control over their reverse logistics (RL) process. According to Blackburn et al. [1], most reverse supply chains are organized to carry out five processes—product acquisition, reverse logistics, inspection and disposition, remanufacturing or refurbishing, and creation of alternative markets for the recovered products. Refurbished products are often offered as a substitute to the original products in a secondary market to the customers those are attracted by the brand, but do not wish to pay the price of a new product (e.g. electronics and automobile) [2]. In the present study, we address the benefits of employing product exchange (PE) policy both in primary as well as in secondary markets to increase the collection rate of used products and consequently selling of refurbished products. Fleischmann et al. [3] provided a review of the quantitative models for reverse logistics in which they reported that most of the papers in the area of integrated reverse logistics are confined to single issues while comprehensive approaches are rare as variety of factors are involved in a general framework and the complexity of their interdependencies. System dynamics (SD) is a powerful methodology for obtaining the insights of these kinds of probl
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