Sustainable Closed-Loop Supply Chain Network Design and Optimization

Abstract

The sustainability conception encompasses a wide range from economy to environment and society. Sustainable supply chains, when managed with the right strategies, will ensure several advantages for all collaborators in the chain. With the increasing consumer awareness, the studies conducted in recent years focus on the environmental and social dimensions as well as the economic factor of sustainability. Sustainability factors; “environmental, economic and social” also known as three pillars of sustainability are considered together in order to increase the benefits offered by the sustainable supply chain. In this study, closed-loop supply chain themed studies that deal with three pillars of sustainability in the literature were examined based on sub-factors. Studies have shown that, Life Cycle Analysis (LCA) methods such as ReCipe, Eco-Indicator 99 and emission are the approaches used to determine the environmental factors of sustainability. Cost, profit and Net Present Value (NPV) methods are used to measure the economic dimension of sustainability. Job opportunities, losses and Customer Service Level (CSL) are most commonly used as sub-criteria to determine social factors. Accordingly, a sustainable closed-loop supply chain model consisting of seven echelons has been examined. A deterministic mixed integer linear programming model (MILP), which includes the economic dimension of sustainability, has been developed and enclosed with sample solutions. Suggestions for sustainability criteria and improving the proposed model have been made for future studies