A multi-objective closed-loop supply chain model for multiple generations of a product with mandatory product take-back

Date of Publication


Document Type

Master's Thesis

Degree Name

Master of Science in Industrial Engineering


Gokongwei College of Engineering


Industrial Engineering

Thesis Adviser

Dennis E. Cruz

Defense Panel Chair

Richard Li

Defense Panel Member

Eric A. Siy,
Eppie E. Clark


Closed-loop supply chain studies have been abundant in literature in the past years primarily because of the goal of companies to achieve economic and environmental sustainability. A great number of the researches in the field involve mathematical modeling as the tool for analysis. Recent models are very extensive and detailed compared to earlier models, but these models have three areas for improvement in common.

The first point is that the models are usually cost minimization or profit maximization only, with no consideration of minimizing emissions of closed-loop supply chain models. Next, the models are simplified as constant values are assumed for the demand and quantity of units returned. Lastly, the models are usually generic product-wise as they do not consider a specific product or industry, which may potentially overlook complexities involved with the industry. This research focuses on the high technology products industry where there are complexities such as the presence of multiple generations of a product, and mandatory take-back programs.

This study addressed these concerns by proposing a multi-objective mathematical model for a closed-loop supply chain of multiple generations of high technology products with mandatory product take-back, optimizing decisions on the introduction time of generations, production, purchasing, collection and recovery, under economic (i.e. Total profit) and environmental impact (i.e. Total emissions) objectives. The model also considers a modified sales-return relationship where the amount of units sold is used to predict the quantity and quality of the returns.

The model is a mixed integer nonlinear program which was validated using the DICOPT solver of GAMS. A modified {u1D700}-constraint method was used to address the multi-objective nature of the model.

Sensitivity analysis was performed to address the sub-problems of the model and the results reveal several insights which include the following: (1) MGP as a concept is definitely profitable, but it will always have a negative impact on the environment in terms of emissions. On the other hand, the results also suggest that management of the introduction and discontinuation of generations can control the objectives. (2) The modified sales-return relationship introduces factors such as the product return curve and product durability that previous models are not able to account for. These factors have an impact on the periodic operations and collection decisions. (3) A mandatory take-back program can be successful in decreasing emissions, but it will have a negative impact on the profit of the company. The policy also decreases the quantity of virgin materials used which could also be a measure of environmental sustainability. (4) Among the different activities in a closed-loop supply chain, the forward supply chain activities greatly affect both profit and emissions. This implies that a company should consider focusing on controlling the costs and emissions of the forward supply chain section of their closed-loop supply chain. (5) In general, a succeeding generation should be introduced during the growth stage of the current generation when there are less imitator customers. On the other hand, when there is a high portion of imitator customers, the succeeding generation should be introduced during the maturity stage of current generation.

For future studies, it is recommended to extend the scope to treat some parameters such as the selling price as decision variables. A different demand equation may also be tested by future models. Other measures for environmental sustainability can also be looked into, where a possible measure is the amount of virgin materials used with the consideration of the abundance or scarcity of the material. It is also suggested to develop an EPR policy to manage MGP strategies. Lastly, it is possible for future researches to investigate other environmental policies.

Abstract Format






Accession Number


Shelf Location

Archives, The Learning Commons, 12F Henry Sy Sr. Hall

Physical Description

1 computer optical disc ; 4 3/4 in.

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