Integrating Bass model in a closed loop supply chain system with low and high product return scenario under carbon cap and trade policy

Abstract

AbstractSustainability has become a major industry concern in the last decade to maintain the prosperity of current and future generations. A closed-loop supply chain (CLSC) is considered in line with sustainability because it involves the return of used products in manufacturing, which will reduce end-of-life product waste and the use of raw materials. This research has two contributions to the CLSC literature. First, demand and the quantity of returned products are estimated using the Bass model with a certain return rate, which will become the input of the product mix decision model. Second, carbon caps and trade policy is considered in the model to achieve sustainability. The analysis showed that carbon bought and sold are significantly affected by carbon cap threshold, manufacturing cost, and remanufacturing cost in both low- and high-return cases. The profit was not sensitive to the change in carbon cap threshold and remanufacturing cost but was significantly impacted by the change in manufacturing cost.

Keywords

• Sustainable industry
• Bass model
• closed-loop supply chain
• remanufacturing
• carbon cap and trade