With the technological developments and rapid changes in demand pattern, diverse varieties of electronic products are entering into the market with reduced lifecycle which leads to the environmental problems. The awareness of electronic products take-back and recovery has been increasing in electronic products supply chains. In this paper, we build a system dynamics model for electronic products closed-loop supply chain distribution network with the old-for-new policy and three electronic products recovery ways, namely, electronic products remanufacturing, electronic component reuse and remanufacturing, and electronic raw material recovery. In the simulation study, we investigate the significance of various factors including the old-for-new policy, collection and remanufacturing, their interactions and the type of their impact on bullwhip, and profitability through sensitivity analysis. Our results instruct that the old-for-new policy and three electronic products recovery ways can reduce the bullwhip effect in the retailers and the distributors and increases the profitability in the closed-loop supply chain distribution network.
With science and technology rapid development, the number of electronic products is rapidly increasing, the update speed is quicker, and the lifestyle becomes shorter and shorter. This phenomenon can result in the electronic products’ recovery and reuse problem. The regulation of recycling and disposal of waste electronic products is proposed in 2004. The televisions, refrigerators, washing machines, air conditioning, and computer products are listed in the first five recycling product catalogues. Thus, not only considering the production, inventory and distribution problem, but also considering the old electronic products’ recovery and reuse problem when the electronic products manufacturer make project.
On the problem of the old-for-new policy, many scholars have done a lot of works. Fleischmann et al. [
Geyer and Blass [
Junior and Filho [
To our knowledge, on the problem of the old-for-new policy in closed-loop supply chain, the research objects are the two or multiple-level closed-loop supply chains consisting of one manufacturer and one retailer or multiple manufacturers and multiple retailers. On the contrary, in this paper, we consider a SD model for an electronic products closed-loop supply chain distribution network which includes one-electronic-product manufacturer, two-electronic-product distributor, and two-electronic-product retailer. We assumed that the remanufacturing process can bring back the used electronic products into an “as good as new” condition and the remanufactured electronic products can be redistributed in primary market to satisfy the demands of the customers. What is more, we come up with three electronic products recovery ways, namely: electronic products remanufacturing, electronic component reuse and remanufacturing and electronic raw material recovery and add the-old-for-new-policy to the electronic products closed-loop supply chain distribution network. At last, we design an experiment to examine the impact of various parameters of the electronic products supply chain distribution network model on bullwhip effect and profit (Figure
The rest of this paper is organized as follows. Section
In China, most of the electronic products companies mainly focus on managing the forward supply chain and pay no attention to recycling the old electronic products which leads to the extension of time, the backlog of inventory, and the decrease of profit. Depending on the electronic product’s value, manufacturer has a variety of options to maximize the value of returned electronic products through multiple liquidation channels. For the purpose of this study, we design three scenes in the paper.
Most of the time, the remanufacturing of the old electronic products is, respectively, for the producing of the traditional electronic products. After break-up, the old electronic products can be new electronic products and they can satisfy the costumer’s demand (Östlin et al. [
Sometimes, because of the quality of the old electronic products, it cannot enter into the primary market. So the secondary market plays a very important role. It can create new economic value and reduce environmental pollution (Rogers et al. [
Some of the waste electronic products have no value directly discarded, due to the environmental protection and legal requirements. Manufacturer should pay attention to the processing of waste electronic products. This research mainly studies the electronic product recovery, the forward supply chain distribution network is mainly composed of one-electronic-products supplier, one-electronic-product manufacturer, two-electronic-product distributor, and two-electronic-product retailer. The reverse supply chain mainly includes electronic products’ recovery and electronic components’ recovery and electronic raw materials’ recycling.
System dynamics (SD) is a kind of tools used for modeling and simulation, and the system flow chart is used to describe the relationship between elements. The system dynamics model mainly includes statement variable, rate variable, and level variable. Based on above instruction, the electronic products closed-loop supply chain distribution network system conceptual model and flow chart are shown in Figures
The electronic products closed-loop supply chain distribution network system conceptual model.
The electronic products closed-loop supply chain distribution network system dynamics flow chart.
According to system dynamics flow chart (Figure
The forward electronic products closed-loop supply chain can include several parts: raw material, component inventory, manufacturer inventory, distributor inventory, and retailer inventory. Manufacturer’s demand for raw materials determines the inventory of raw materials. The inventory of component depends on component productivity, component ratio used for producing electronic product, and component remanufacturing ratio. Component ratio used for producing electronic product depends on the producing time, the expect order, the difference of the manufacturers’ inventory, and manufacturers’ inventory adjustment time. Electronic products productivity depends on component ratio used for produce electronic product. Manufacturers’ inventory depends on products produce ratio, the delivery ratio to distributor, and remanufacturing ratio 1. The delivery ratio to distributor depends on the delivery time, the backlog orders of distributor, the distributors’ order, and manufacturers’ inventory. Distributors’ inventory depends on the delivery ratio to distributor and the delivery ratio to retailer. The delivery ratio to retailer depends on the delivery time, distributors’ inventory, and the backlog orders of retailer. Retailer inventory depends on the delivery ratio to retailer and electronic products market sales’ ratio.
The reverse electronic products closed-loop supply chain can include electronic products recovery, component recovery, and raw material recovery and remanufacturing. The electronic products recovery can include inspection, sorting, disassembly, and assembly. The recovery electronic products should be inspected; some of them can be used for making new products, and some of them can be used for making old products. The quantity of recycling product depends on remanufacturing ratio, and electrical product can be remanufacturing rate. The quantity of the electrical remanufacturing depends on remanufacturing ratio. The old component can be divided into directly remanufacturing component and need processing component. Directly remanufacturing component can be recovered and reused directly, and need processing component should be processed and recovered. The component which cannot be processed should be recovered as raw material. The variable in recovery process of component and raw material includes parts replacement ratio and electronic component remanufacturing ratio. Parts replacement ratio depends on remanufacturing ratio and component replacement ratio. The parts ratio which cannot be used for remanufacturing depends on the parts’ remanufacturing ratio and other variables. Electronic component remanufacturing ratio depends on no direct reuse of component ratio, secondary processing time, disassembly and assembly time, and component remanufacturing ratio.
In order to analyze the relationship between the parameters, we set some parameters in system model (Table
Main parameters.
Parameters | Time | Parameters | Time |
---|---|---|---|
Dynamics weeks | 600 weeks | Component production time | 1.5 weeks |
Component production capacities | 800 units/week | Sustainable time of component inventory | 1.5 weeks |
Material production delay | 1 week | The capacity | 850 units/week |
Production time | 1.5 weeks | Moving average period | 1 week |
The exchange rate | 20% | Adjustment time of component inventory | 2 weeks |
Coefficient weight | 0.8 | Production delays | 1 week |
The delivery delay | 1.5 weeks | Transportation delay | 1 week |
Order delay of distributor 1 | 1 week | Order delay of distributor 2 | 1 week |
Processing ratio | 10% | Retailer 1 order delay | 1 week |
The old recovery ratio | 15% | Quantity of per electronic products | 6 weeks |
Component direct reuse ratio | 45% | Delay time | 40 weeks |
Retailer 2 order delay | 1 week | Component remanufacturing rate | 45% |
Sustainable time of the manufacturer’s inventory | 1.5 weeks | Inventory adjustment time of manufacturers | 2 weeks |
Retailer 1 inventory adjustment time | 2 weeks | Adjustment time of distributor 1 inventory | 2 weeks |
Adjustment time of distributor 2 inventory | 2 weeks | Retailer 2 inventory adjustment time | 2 weeks |
Remanufacturing proportion | 50% |
In this part, we establish the electronic products closed-loop supply chain distribution network by Vensim software. System dynamics equations are as follows: The recycled electronic products through the old-for-new policy = (the old-for-new rat) × (used in electronic products); Quantity of the past recycling = (used in electronic products-the recycled electronic products through the-old-for-new-policy) × (the component recovery ratio); The total recovery ratio = (recycling electronic products through the-old-for-new-policy) + (the component recovery ratio); Market demand = (the past market demand) + (weight coefficient) × (the-old-for-new-ratio)
The old-for-new ratio in electronic products belongs to (0,1), and the past recycling ratio refers to the used electronic products without the old-for-new ways and proportion within (0, 1). Weight coefficient defined the relationship between the old-for-new policy and electronic products market demand. The fact that the weight coefficient is equal to zero refers to the fact that old-for-new policy has no effect on demand. The fact that the weight coefficient is greater than zero refers to the fact that the old-for-new policy has effect on demand.
By setting parameter and running the electronic products closed-loop supply chain distribution network system model, we can know that the old-for-new policy impacts the market demand and the total quantity of recycling. We can see from Figure
The old-for-new policy impact on market demand.
The old-for-new ratio (%) | Market demand | |||||
---|---|---|---|---|---|---|
Weight coefficient is 0 | Weight coefficient is 0.5 | Weight coefficient is 1 | ||||
Mean | Variance | Mean | Variance | Mean | Variance | |
10 | 3506.54 | 1508.535 | 3506.54 | 1508.535 | 3506.54 | 1508.535 |
30 | 3506.54 | 1508.535 | 4294.671 | 1609.177 | 5082.802 | 1822.154 |
50 | 3506.54 | 1508.535 | 4820.091 | 1740.779 | 6133.642 | 2223.363 |
70 | 3506.54 | 1508.535 | 5345.512 | 1912.202 | 7184.483 | 2703.296 |
90 | 3506.54 | 1508.535 | 5870.932 | 2113.78 | 8235.323 | 3227.018 |
100 | 3506.54 | 1508.535 | 6133.642 | 2223.363 | 8760.744 | 3499.225 |
The old-for-new policy affects the system’s variables.
There is an important problem existing in the supply chain management that the information can be magnified and distorted in the process of upstream transmission. It refers to the “bullwhip effect.” The ratio is between order variance and needs variance. Because, the use of electronic products on the market is uncertain, the recycling of the electronic products can be uncertain. It cannot be avoided.
We simulate retailers and distributors change of demands and orders in electronic products closed-loop supply chain distribution network. We calculate the bullwhip effect, and the parameters are at the same as the front.
We can see, from Figure
The old-for-new policy has influence on the profit.
The old-for- |
Weight coefficient = 0 | Weight coefficient = 0.5 | Weight coefficient = 1 | |||
---|---|---|---|---|---|---|
Profits with the old-for-new policy | Profits without the old-for-new policy | Profits with the old-for-new policy | Profits without the old-for-new policy | Profits with the old-for-new policy | Profits without the old-for-new policy | |
0 | 100 | 100 | 100 | 100 | 100 | 100 |
20 | 532 | 406 | 603 | 452 | 673 | 513 |
40 | 635 | 503 | 742 | 503 | 731 | 631 |
60 | 741 | 642 | 841 | 613 | 903 | 741 |
100 | 894 | 692 | 1034 | 852 | 1037 | 840 |
The old-for-new policy impact on quantity of recycling.
In order to illustrate how the old-for-new policy impacts profits, define the following profit formula: Profit = (recycling benefits − recycling cost-
The old-for-new policy has influence on the bullwhip effect.
The old-for-new policy has impact on the profit.
If the old-for-new ratio is equal to zero, about 75% of the electronic products can be used for remanufacturing, recycling ratio can be increased, recycling cost can be decreased, and the profit can be increased. If the old-for-new ratio is 25%, the normal recycling ratio is 25% and the remanufacturing ratio is more than 45%; it can cause profit. If all the old electronic products can be recovered by the old-for-new ways, the remanufacturing ratio is more than 25%; it can cause profit. This shows that it can generate profits when the remanufacturing ratio is in a relatively low level, with enhancing recycling ratio for the old-for-new ways.
Using sensitivity method in this section, analysis parameters impact the bullwhip effect and profit in electronic products closed-loop supply chain distribution network.
The first simulation time sets 1500 units, and we maintain that the inventory sustainable time and inventory adjustment time are constant, and other variables belong to 0% and 100%. The second simulation time sets 1500 unit, and we maintain inventory sustainable time and inventory adjustment time between 1 and 7, with 1-week speed changing, and other variables are constant.
We can get the following conclusion from Table
Sensitivity analysis in electrical products closed-loop supply chain.
Parameters | Retailers 1 and 2 bullwhip effect | Distributors 1 and 2 bullwhip effect |
---|---|---|
Inventory sustainable time and inventory adjustment time (constant) | ||
The old-for-new ratio, remanufacturing ratio ↑ |
|
|
Recycling ratio (constant), remanufacturing ratio ↑ |
|
|
Remanufacturing ratio (constant), the old-for-new ratio ↑ |
|
|
Remanufacturing ratio (constant), recycling ratio ↑ |
|
|
The old-for-new ratio (constant), recycling ratio ↑ |
|
|
Recycling ratio (constant), the old-for-new ratio ↑ |
|
|
The old-for-new ratio (constant), recycling ratio (constant), |
||
Retailer 1 inventory adjustment time ↑ |
|
|
Retailer 1 inventory sustainable time ↑ |
|
|
Distributor 1 inventory adjustment time ↑ | The same | The same |
Distributor 1 inventory sustainable time ↑ | The same | The same |
From the first simulation result, we can see that the inventory sustainable time and inventory adjustment time are constant. (1) With the old-for-new ratio increasing, the bullwhip in retailers 1 and 2 and the bullwhip effect in distributors 1 and 2 are reduced; (2) remanufacturing ratio is constant, and with the old-for-new ratio and the recycling ratio increasing, the bullwhip in retailers 1 and 2 and the bullwhip effect in distributors 1 and 2 are reduced; (3) the recycling ratio is constant, and with electronic products remanufacturing increasing, the bullwhip in retailers 1 and 2 and the bullwhip effect in distributors 1 and 2 are reduced.
From the second simulation result, the old-for-new ratio, the recycling ratio, and remanufacturing ratio are constant. (1) With retailers 1 and 2 inventory sustainable time and retailers 1 and 2 inventory adjustment time increasing, the bullwhip in retailers 1 and 2 is reduced, and the bullwhip effects in distributors 1 and 2 are constant; (2) with distributors 1 and 2 inventory sustainable time and distributors 1 and 2 inventory adjustment time increasing, the bullwhip effect in distributors 1 and 2 is reduced, and the bullwhip in retailers 1 and 2 is constant.
The electronic products remanufacturing ratio should be changed, and other variables are constants in the first simulation time; recycling ratio and products remanufacturing ratio should be changed, and other variables are constants in the second simulation time; the old-for-new ratio should be changed, and other variables are constants in the third simulation time. The result is in Table
The old-for-new ratio, remanufacturing ratio, and recycling ratio influence on the profits in supply chain.
Parameters | The profits of the reverse supply chain distribution network | Parameters | The profits of the |
---|---|---|---|
The old-for-new ratio (constant), recycling ratio (constant) | Remanufacturing ratio% (>30%), recycling ratio ↑ | ↑ | |
Remanufacturing ratio% ↑ | ↑ | Recycling ratio (constant), |
|
The old-for-new ratio (constant) | The old-for-new ratio ↑ | ↑ | |
Remanufacturing ratio% (<30%), recycling ratio ↑ | ↓ |
We can see the following from Table
In this section, using variance analysis, we analyze the related parameters impact on the bullwhip effect and the profit in the electronic products closed-loop supply chain distribution network. System parameter values are shown in Table
The results of variance analysis.
Parameters | Retailer 1 bullwhip effect | Retailer 2 |
Distributor 1 |
Distributor 2 |
Profit of reverse supply chain distribution network |
---|---|---|---|---|---|
Weight coefficient | 0.462 | 0.452 | 0.682 | 0.710 | 0.002 |
The old-for-new ratio % | 0.001 | 0.000 |
0.000 |
0.000 |
0.000 |
Recycling ratio % | 0.000 |
0.000 |
0.000 |
0.000 |
0.864 |
Remanufacturing ratio % | 0.000 |
0.000 |
0.000 |
0.000 |
0.000 |
(The old-for-new ratio) × (recycling ratio) | 0.000 |
0.000 |
0.000 |
0.000 |
1.264 |
(The old-for-new ratio) |
0.021 |
0.002 |
0.008 | 0.005 | 0.000 |
(Recycling ratio) |
0.107 | 0.201 | 0.975 | 0.945 | 0.002 |
(Weight coefficient) |
0.001 |
0.000 |
0.002 |
0.001 |
0.001 |
(Weight coefficient) |
0.963 | 0.893 | 0.962 | 0.843 | 0.000 |
(Weight coefficient) |
0.752 | 0.798 | 0.000 |
0.000 |
0.664 |
We can get the following results from Table The old-for-new ratio, recycling ratio, and remanufacturing ratio have more impact on the electronic products retailers 1 and 2 bullwhip effect, distributors 1 and 2 bullwhip effect, and the profit of the electronic products reverse supply chain distribution network. So, with the increasing of the old-for-new ratio, recycling ratio, and remanufacturing ratio, the bullwhip effect can be decreased and the profit of the electronic products reverse supply chain distribution network can be increased. (The old-for-new ratio) × (recycling ratio) has more impact on the electronic products retailers 1 and 2 bullwhip effect and distributors 1 and 2 bullwhip effect; however, it has no impact on the profit of the electronic products reverse supply chain distribution network. (Remanufacturing ratio) × (the old-for-new ratio) has no impact on retailers 1 and 2 bullwhip effect and distributors 1 and 2 bullwhip effect; however, it has more impact on the profit of the electronic products reverse supply chain distribution network, because by raising the electronic products remanufacturing ratio, we improve the utilization rate of the old electronic products, and this can reduce the electronic products manufacturing cost, so as to improve the profit of the electronic products reverse supply chain distribution network.
The old-for-new policy is introduced into the simulation model, thus, enhancing recycling efficiency, and we can see that, with improving the old-for-new ratio, the recycling ratio can be improved. With the increasing of the recovery ratio, the remanufacturing ratio, and the old-for-new ratio, retailers 1 and 2 bullwhip effect can be reduced and distributors 1 and 2 bullwhip effect can be reduced, too. With the improving of the old-for-new ratio, the profit of electronic products of reverse supply chain distribution network can be improved.
The authors declare that they have no competing interests.
This work is supported by the Fundamental Research Funds for the Central Universities Project nos. JBK1607134 and JBK1507100.