Cost optimization in a closed loop supply chain network-a case study

Abstract

In the present scenario, the emphasis on environment concern and cost reduction has increased due to which it is necessary to concentrate on reverse logistics to get back the potential value from the used or end-of-life product by recycling, remanufacturing and reuse. The demand of lead is increasing due to the increase in demand of lead acid batteries in automobile and domestic purpose and to meet this increasing demand. End of life batteries are identified as a significant source of lead by recycling process as lead has a unique quality of being recycled up to 97%. A case study of lead acid battery manufacturing company has been presented. In this study, the closed loop supply chain network of a battery manufacturing unit has been investigated and with the objective of cost optimization. The study has been carried out in the context of two aspectsrate of return and recycling rate. Firstly, by using linear programming through TORA optimizing software Secondly, by using genetic algorithm through EVOLVER 6 software package. The results obtained during optimization expressed that as the rate of return and recycling rate of a company increases, the total supply chain cost reduces and the saving of the company increases. During study it is also comes into notice that if a company has recycling rate of lead above 67.56% then it is advisable to practice closed loop supply chain otherwise it is beneficial to practice forward supply chain alone. Comparison between the results obtained by two techniques has also been done which shows that the results obtained by both techniques are the same