Closed-loop supply chain network with interaction of forward and reverse logistics

Document Type


Department or Administrative Unit

Finance and Supply Chain Management

Publication Date



Beneficial to the environment but complex in nature, closed-loop supply chain (CLSC) has been understandably a topic of studies for a lot of researchers. However, most of the literature focuses on the homogeneity of CLSC products and on the dyadic structure of the CLSC mostly involving single manufacturers, distributors, or retailers. Very seldom do we find studies conducted in the analysis of the CLSC with network structure, in which multiple agents compete and coordinate. Inspired by some recent business cases, we develop a coupled CLSC network model dealing with heterogeneous products facing different market demands. The end-of-life product from the forward supply chain is collected and recycled so that raw material can be extracted and used as an input for the reverse supply chain which produces another type of product. Moreover, in each supply chain, raw material suppliers, manufactures, and retailers have to compete and coordinate to satisfy the demand while the forward and reverse supply chains have to work together to materialize the supply chain “loop”. Additionally, a CLSC network equilibrium is defined and studied by using variational inequalities. The properties of the equilibrium solution are also examined. By applying the modified projection method, we analyze a series of numerical examples. Based on the proposed model, the managerial insights are provided to show how the market size of the forward chain, raw material costs in both forward chain and reverse chain impact the demand, equilibrium prices and total profits of the CLSC network. It is also worth noting that the consumers' environmental awareness is critical to make the coupled CLSC networks viable.


This article was originally published in Sustainable Production and Consumption. The full-text article from the publisher can be found here.

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Sustainable Production and Consumption


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