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<p>In today’s increasingly competitive business landscape, organizations strive to maximize profits while minimizing costs and waste. A closed-loop supply chain (CLSC) is a strategic approach that has gained significant importance in achieving this goal. With this, the present study presents a mixed-integer nonlinear programming optimization model based on a multi-period, multi-product, and multi-echelon CLSC for time-sensitive products. A case study considering the fast fashion industry is solved to demonstrate the capabilities and features of the proposed model. The model demonstrates how optimizing selling prices and offering incentives for retailers to return expired and near-expired products for upcycling or selling to alternative markets improve profits. Results for the case point to a 20% decrease in profit when reverse logistics is barred and expired items are discarded. Other determinants of profitability include retailers’ limit of holding inventory, variability of demand, demand in the upcycled items, and demand in the alternative markets. Pricing can be optimized to influence the demand for the products, which in turn provides guidance to company operations. Companies that market time-sensitive products can use the model as a strategic tool to transition toward more sustainable and profitable supply chains by minimizing waste and upcycling products.</p> Graphical abstract <p></p>

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Optimization of pricing and incentives for product returns with time-based quality in closed-loop supply chains

  • 期刊论文

  • 发表日期：

    2025年7月6日

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  • Therese Anne G. Alfaro,
  • Daniel Jr. M. Epilepsia,
  • Navneen Kaur,
  • Carizza Dioselle C. Leonardo,
  • Juval Randell C. Salvador,
  • Angelo C. Ani,
  • Jayne Lois San Juan

摘要

In today’s increasingly competitive business landscape, organizations strive to maximize profits while minimizing costs and waste. A closed-loop supply chain (CLSC) is a strategic approach that has gained significant importance in achieving this goal. With this, the present study presents a mixed-integer nonlinear programming optimization model based on a multi-period, multi-product, and multi-echelon CLSC for time-sensitive products. A case study considering the fast fashion industry is solved to demonstrate the capabilities and features of the proposed model. The model demonstrates how optimizing selling prices and offering incentives for retailers to return expired and near-expired products for upcycling or selling to alternative markets improve profits. Results for the case point to a 20% decrease in profit when reverse logistics is barred and expired items are discarded. Other determinants of profitability include retailers’ limit of holding inventory, variability of demand, demand in the upcycled items, and demand in the alternative markets. Pricing can be optimized to influence the demand for the products, which in turn provides guidance to company operations. Companies that market time-sensitive products can use the model as a strategic tool to transition toward more sustainable and profitable supply chains by minimizing waste and upcycling products.

Graphical abstract