4.7 Article

Proportional order-up-to policies for closed-loop supply chains: the dynamic effects of inventory controllers

期刊

INTERNATIONAL JOURNAL OF PRODUCTION RESEARCH
卷 59, 期 11, 页码 3323-3337

出版社

TAYLOR & FRANCIS LTD
DOI: 10.1080/00207543.2020.1867924

关键词

Closed-loop supply chain; bullwhip effect; supply chain dynamics; remanufacturing system; proportional order-up-to

资金

  1. Universita di Catania, through the Piano della Ricerca programme, under the project GOSPEL
  2. Council of Gijon through the Instituto Universitario de Tecnologia Industrial de Asturias (IUTA), under the project 'Design of Logistics Networks for a Circular Economy' [SV-20-GIJON-1-20]
  3. Universidad de Sevilla (V/VI PPIT-US)
  4. Junta de Andalucia through the project EFECTOS [US-1264511]
  5. Junta de Andalucia through the project DEMAND [P18-FR-1149]
  6. Spanish Ministry of Science and Innovation, under the project ASSORT [PID2019-108756RB-I00]

向作者/读者索取更多资源

Research indicates that POUT policies are valuable tools for enhancing the dynamics of closed-loop supply chains, with significant cost savings achievable in hybrid manufacturing/remanufacturing systems. To optimize the balance between order and inventory variability, factors such as cost structure and average return rate should be considered, with adjustments to the controllers' time constant necessary to adapt to increasing levels of circularity. Aligning the calibration of POUT controllers and forecasting methods is recommended to improve the economic performance of CLSCs.
Increasing the understanding of the management of closed-loop supply chains (CLSCs) is fundamental to accelerate the much-desired transition towards the circular economy. From this perspective, we investigate the value of proportional order-up-to policies (POUT) policies and the adjustment of their inventory controllers in these systems. These policies are often used to improve the performance of traditional supply chains due to their ability to cope with the damaging bullwhip effect; however, they have not been sufficiently studied in CLSCs. Through a difference equation modelling approach, we show that POUT policies are also a valuable instrument for enhancing the CLSC dynamics. Specifically, we find that the POUT model outperforms the traditional order-up-to policy in a hybrid manufacturing/remanufacturing system, yielding significant cost savings. To optimise the key trade-off between order and inventory variability, the tuning of the inventory controllers needs to consider not only the cost structure of the CLSC but also the average return rate. Specifically, managers should react to increasing levels of circularity by lowering the setting of the controllers' time constant. In the light of our findings, we suggest two strategies for aligning the calibration of the POUT controllers and the forecasting methods to increase the economic performance of CLSCs.

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