Modeling the Closed-Loop Supply Chain in Cocoa Industry Using Profit-Sharing Strategy

Cocoa remains an essential commodity produced by many countries as a raw material for chocolate products. Cocoa husks predominate in the cocoa pod structure accounting for 76% of the fruit unit, there by resulting in a significant quantity of waste. Moreover, the cocoa pod husk can be processed into organic fertilizer. However, its common model needs to consider the waste network. Therefore, it was deemed necessary to design a supply chain network system for the agri-food industry that manages cocoa waste systematically. This study aims to develop a Closed-loop Supply Chain (CLSC) system model of the cocoa industry in which maximizing the total profit of the supply chain system as the objective function. A Non-linear Programming (NLP) approach was used to represent the CLSC model with a profit-sharing strategy. Furthermore, the amount of cocoa delivered through the system (Q1 opt) is the decision variable of the model by considering the trade-off between handling cost and distribution cost. The results of the integrated model development increased profits by up to 3.9% higher.