Factor analysis of environmental effects in circular closed‐loop supply chain network design and modelling under uncertainty in the manufacturing industry

Abstract

Sustainable development and competitive advantage are impacted by strategic choices that maximize resource value and reduce waste. Numerous instances of thriving OEM remanufacturing can be observed, predominantly in the business‐to‐business domain. The significance of Closed‐Loop Supply Chain (CLSC) in generating value and managing the recovery process is widely acknowledged within the supply chain industry. Manufacturing companies now have to come up with green supply chain and process design strategies in response to recent changes in environmental regulations. This study designates the specific features of circular closed‐loop supply‐chain design considering end‐of‐life products. Uncertainty in various aspects, such as acquisition, processing, and market stages, is impeding the progress of circular economies and also sustainable development in closed‐loop supply chains (CLSCs). This has led to increased complexity in remanufacturing processes and decreased efficiency. To address this issue, the study proposes a comprehensive, integrative approach for establishing a sustainable CLSC network that adapts to fluctuating demand through a questionnaire analysis. Moreover, the study introduces a multi‐objective optimization model for a dual‐channel supply chain network, aiming to enhance the flow. This model considers both economic and environmental objectives to achieve a sustainable and efficient supply chain system. To determine the ideal circular closed‐loop supply chain (CLSC) network design, the research proposes linear programming model with mixed integer, where recovery can take place in one of three ways: through material recovery, component recovery, or product recovery. Numerous findings from a thorough analysis by data backup that inform CLSC managers of ways to improve product returns in terms of quantity and quality. To address the uncertainty problem, the research also developed the fuzzy credibility constraint technique with a Simulated Annealing algorithm. Using cutting‐edge methods, it is explored and compared how sensitivity analysis results, the impact of altering the problem parameters, and the performance of the suggested model respectively.