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<p>Environmental sustainability has become a critical priority for businesses, driving the adoption of closed-loop supply chains (CLSC) to mitigate waste and reduce environmental harm. The CLSC enables the collection, inspection, and remanufacturing of used products, promoting resource efficiency while delivering economic and societal benefits. In today’s competitive landscape, price-dependent demand significantly influences consumer behaviour, necessitating dynamic pricing strategies. Simultaneously, multi-shipment policies are vital for maintaining product freshness, minimizing holding costs, and improving supply chain performance. A significant challenge in CLSC arises from imperfect production, where products fail to meet quality standards due to defects, process variations, or material inconsistencies. Nowadays, companies strategically implement a product inspection policy, but the inspection process does not always detect every error. Acknowledging the inherent risks of inspection errors, the model accounts for type I (rejecting non-defective items) and type II (accepting defective items) errors to address potential inaccuracies in the inspection process. Additionally, the percentage of errors is considered a linear function of inspection expenses (screening cost). This study develops a CLSC model integrating multi-shipment policies and price-sensitive demand while addressing the complexities of imperfect production and inspection errors. The proposed model provides a CLSC framework for optimizing production, pricing, shipment decisions, and screening costs to balance profitability and environmental sustainability. The numerical analysis of the developed study demonstrates that an efficiently functioning production system, which yields only perfect items, can achieve up to a 17.24% increase in profit compared to a system with imperfect production, emphasizing the economic advantage of high-quality output. The sensitivity analysis validates the model’s robustness, demonstrating its applicability across diverse scenarios and highlighting the impact of imperfect production on CLSC performance.</p>

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Addressing Imperfect Production and Inspection Errors in Sustainable Closed-Loop Supply Chains with Multi-Shipment Policies and Price Reliant Demand

  • 期刊论文

  • 发表日期：

    2025年6月30日

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  • Ahmad Hasan,
  • Amrina Kausar,
  • Chandra K. Jaggi

摘要

Environmental sustainability has become a critical priority for businesses, driving the adoption of closed-loop supply chains (CLSC) to mitigate waste and reduce environmental harm. The CLSC enables the collection, inspection, and remanufacturing of used products, promoting resource efficiency while delivering economic and societal benefits. In today’s competitive landscape, price-dependent demand significantly influences consumer behaviour, necessitating dynamic pricing strategies. Simultaneously, multi-shipment policies are vital for maintaining product freshness, minimizing holding costs, and improving supply chain performance. A significant challenge in CLSC arises from imperfect production, where products fail to meet quality standards due to defects, process variations, or material inconsistencies. Nowadays, companies strategically implement a product inspection policy, but the inspection process does not always detect every error. Acknowledging the inherent risks of inspection errors, the model accounts for type I (rejecting non-defective items) and type II (accepting defective items) errors to address potential inaccuracies in the inspection process. Additionally, the percentage of errors is considered a linear function of inspection expenses (screening cost). This study develops a CLSC model integrating multi-shipment policies and price-sensitive demand while addressing the complexities of imperfect production and inspection errors. The proposed model provides a CLSC framework for optimizing production, pricing, shipment decisions, and screening costs to balance profitability and environmental sustainability. The numerical analysis of the developed study demonstrates that an efficiently functioning production system, which yields only perfect items, can achieve up to a 17.24% increase in profit compared to a system with imperfect production, emphasizing the economic advantage of high-quality output. The sensitivity analysis validates the model’s robustness, demonstrating its applicability across diverse scenarios and highlighting the impact of imperfect production on CLSC performance.