Yield paradox in closed loop supply chains with auto- and cross-correlated demand and return processes


We investigate the dynamics of a closed-loop supply chain with VAR(1) demand and return processes. It is shown that the manufacturing cost is convex in the yield rate at the remanufacturer, which is an undesirable characteristic from a sustainability viewpoint. We consider replenishment policies that overcome this issue.

30th Production and Operations Management Society Annual Conference, Washington, USA, 2nd-6th May