Dynamic System Modeling for Closed Loop Supply Chains System

The need for holistic modeling efforts for returns that capture the extended closed loop supply chain (CLSC) system at strategic as well as operational level has been clearly recognized by the industry and academia. Strategic decision-makers need comprehensive models that can guide them in efficient decision-making to increase the profitability of the entire forward and return chain. Therefore, determination of a near optimal design configuration, which includes the environmental, economical and technological capability factors, is important in strategic decision-making effort that affect the profitability of the closed loop supply chain. In this paper, we adopted an improved system dynamics methodology to tackle strategic issues that affect various performance measures, like market, time/cost, environment etc., for closed loop supply chains. After studying real life implementation issues in CLSC design, we presented guidelines for the PBM (Participative Business Modeling) methodology and presented its extension for the strategic dynamic system modeling of return chains. Finally, we demonstrated the measurement of operational performance by extending SD (system dynamic) application to closed loop supply chain management.