Disruption Risk Management in Reverse Supply Chain by Using System Dynamics

Abstract

We examine reverse supply chains consisting of three members (collector; disassembly center; remanufacturer) and subject to four different types of supply disruption; each with distinct impact on the members of the chain. Using system dynamics methodology; we focus on the quantitative method of disruption risk evaluation by simulation analysis of the impacts of each supply disruption on the Mean profits of the various supply chain member. We introduce the concept of “Impact Degree” to quantify the effects of the supply disruptions. We compare the Impact Degrees of four different types of supply disruption via an illustrative example; and we find that a supply disruption which occurs between end-consumers and the collector has the highest Impact Degree on the collector; the disassembly center and the remanufacturer. This novel quantitative method of disruption risk evaluation can help to investigate the highest risk disruption in all kinds of supply chain not only in reverse supply chain.