System dynamics model for optimizing the recycling and collection of waste material in a closed-loop supply chain

To meet the immediate environmental challenges and sustainable development, Closed-loop Supply Chain (CLSC) management has become increasingly important and urgent. This is in lieu with some severe problems such as global ecological damage, resource wastages and shortages and pollution of the environment, and discretionary exploitation of natural resources. On the other hand, re-manufacturing of used merchandise and bringing them back to the market provides environmental and customer benefits to Original Equipment Manufacturers (OEMs), in addition to cutting back their production cost. This paper aims at evaluating the system behavior of an electrical manufacturing company as a case of study, by using System Dynamics (SD) simulating of Closed-loop Supply Chain (CLSC). VEN-SIM PLE software developed the simulation model. Based on the initial result, customer satisfaction and Green Image Factor (GIF) are lacking in the system. Therefore, to tackle this issue, an improvement model with a collection center was proposed. Results derived from the improved model presented a data of which the demand backlog level fell by 21.19%. Furthermore, the customer satisfaction in the system rose by 21.6%. In addition, as a result of an increase in GIF level from 14.80% to 48.1%, the return products rate rose from 184 items to 614. The method in this research can be used to investigate a variety of CLSC systems and their effects before implementing them in real life. (C) 2015 Elsevier B. V. All rights reserved.