Simulation of remanufacturing in reverse supply chain based on system dynamics

Reverse supply chain management has been an area of increasing attention recently in real-world. In this paper we analyze the behavior of the reverse supply chain through a dynamic simulation model based on the principles of the system dynamics (SD) methodology considering environmental protection policies (EPP) and capacity planning strategies of remanufacturing capacity simultaneously. Then we give the simulation results and compare inventory variances of different logistics participants over time and bullwhip effect between the traditional supply chain and the closed-loop reverse supply chain. The results indicate that remanufacturing can reduce the bullwhip of closed-loop system. Finally, we consider an ldquoopen looprdquo case, in which the remanufactured products can only be redistributed in a secondary market. We compare performances of open loop reverse supply chain with those of closed-loop and draw some significant conclusions.