Planning Environmental and Economic Sustainability in Closed-Loop Supply Chains

A closed-loop supply chain model that incorporates environmental and economic sustainability issues into the planning process of a chain is proposed. End-of-use and end-of-life customer returns are collected through retailers and supply chain-operated collection centers (SCOCs), which are located between the retail outlets that are separated with a distance exceeding a set limit, to facilitate customer returns. Returns are dismantled into components, which are recovered through recovery service providing vendors (RSPs). As much as possible, recovered components are used to produce remanufactured products through quality enhancement. The remaining recovered components are then used to produce second-hand products. The proposed model integrates the overall operations costs and select life cycle assessment (LCA) metrics in procurement, production, collection of returns, recovery, reuse, remanufacturing, transportation, and distribution of products to attain environmental and economic sustainability. Numerical examples illustrate the model’s applicability.