System Dynamics Model to Analysis Oscillation and Amplification in the Closed-Loop Supply Chain

A system dynamics model of a traditional /closed loop supply chain system is investigated in the manufacturer echelon chain under APIOBPCS (Automatic Pipeline Inventory and Order Based Production Control System). The effect of remanufacture and the return ratio on the oscillation and amplification effect were studied. Our results clearly showed that ordering policy designed for a production system with unidirectional flow of materials (i.e., up stream to down stream only), when applied to such an integrated system involving manufacturing remanufacturing can create dynamics in the system. Furthermore, we found that the oscillatory and amplificatory amplitude is much larger than one in traditional supply chain when the remanufacture is introduced into the traditional supply chain, and the fluctuation will become even more greater when the return ratio increasing.