Integration Between Forward And Reverse Supply Chains

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Integration between Forward and Reverse Supply Chains Another important design issue of reverse supply chain concerns potential synergies between different product flows. While forward supply chains typically act as one-way channels, closed-loop supply chains encompass multiple inbound and outbound material flows crossing each other’s path. In this setting, it is intuitive to consider integration as a potential means for attaining economies of scale. Opportunities may concern transportation and reprocessing facilities. As previously discussed, integrating the collection of end-of-life products with the distribution function may help reduce empty rides. Typical examples include refillable soft-drink bottle and various ‘old for new’…show more content…
2.2.2 Production Planning and Inventory Control Capacity Planning Product recovery operations in reverse supply chains are already faced with the challenging problem of adapting their capacity in an effort to increase supply chain profitability related to recovery activities, while dealing with the confines of continuously evolving EPR legislation (Vlachos et al, 2007). Capacity planning is thus becoming even more complex and critical for reverse supply chains. Therefore, a company needs an efficient capacity planning measure to improve economic and environmental performance of its reverse supply chains. However, capacity planning of reverse supply chains is an extremely complex issue, since each time a company considers expanding or contracting collection, sorting and reprocessing capacity, it must consider a myriad of possibilities. Even after the decisions to expand or contract capacity is given, it remains to resolve key issues such as when, where and how much, and all these under the two main competing objectives in capacity planning which are 1) maximization of market share and 2) maximization of capacity utilization. Furthermore, specific external factors affecting capacity stability have to be incorporated into capacity planning. Such factors include uncertainties in product usage and residence time, quantity, timing and quality of end-of-life products, EPR obligations and penalties, and so on (Georgiadis et al., 2006).
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