Push or Pull? The impact of ordering policy choice on the dynamics of a hybrid closed-loop supply chain

Lin,Junyi;Zhou,Li;Spiegler,Virginia L.M.;Naim,Mohamed M.;Syntetos,Aris

[Lin,Junyi] Xi'an Jiaotong-Liverpool University,Suzhou,China [Zhou,Li] University of Greenwich,London,United Kingdom [Spiegler,Virginia L.M.] Kent Business School,Canterbury,United Kingdom [Naim,Mohamed M.] Cardiff Business School,Cardiff,United Kingdom [Naim,Mohamed M.] Cardiff Business School,Cardiff,United Kingdom [Syntetos,Aris] Cardiff Business School,Cardiff,United Kingdom [Syntetos,Aris] Cardiff Business School,Cardiff,United Kingdom

European Journal of Operational Research

Volume:300 Issue:1Pages:282-295

DOI:10.1016/j.ejor.2021.10.031

Publication Year:2022

CAS JCR:2区

ESI Discipline:ENGINEERING

Latest Impact Factor:5.334

Document Type:Journal Article

Identifier:http://hdl.handle.net/20.500.12791/014844

Abstract

We study the dynamic behaviour of a hybrid system where manufacturing and remanufacturing operations occur simultaneously to produce the same serviceable inventory for order fulfilment. Such a hybrid system, commonly found in the photocopier and personal computer industries, has received considerable attention in the literature. However, its dynamic performance and resulting bullwhip effect, under push and pull remanufacturing policies, remain unexplored. Relevant analysis would allow considering the adoption of appropriate control strategies, as some of the governing rules in a push-based environment may break down in pull-driven systems, and vice versa. Using nonlinear control theory and discrete-time simulation, we develop and linearise a nonlinear stylised model, and analytically assess bullwhip performance of push- and pull-controlled hybrid systems. We find the product return rate to be the key influencing factor of the order variance performance of pull-controlled hybrid systems, and thus, to play an important role towards push or pull policy selection. Product demand frequency is another important factor, since order variance has a U-shaped relation to it. Moreover, the product return delay shows a supplementary impact on the system's dynamics. In particular, the traditional push-controlled hybrid system may be significantly influenced by this factor if the return rate is high. The results highlight the importance of jointly considering ordering structure and product demand characteristics for bullwhip avoidance.

Keywords

Bullwhip effect Closed-loop supply chains Nonlinear dynamics Push and pull production System dynamics

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