An Optimisation Tool for Strategic Planning of Multiple Downgraded Market Levels in Circular Supply Chain Management

Recent legislation promotes the adoption of Circular Economy (CE) principles in restructuring supply chains (SCs), being aimed at circling back - through reusing, remanufacturing and recycling actions- end-of-life (EoL) products into production networks. In this sense, the appropriate design of circular supply chains (CSCs) can enhance resource efficiency, extend product lifecycle, and minimise waste, thereby providing firms with a competitive advantage while contributing to sustainability efforts. This study develops a bi-objective mixed-integer linear programming (MILP) model, characterised by a compact and generalised formulation which is aimed at designing and optimising strategic decisions in a circular supply chain (CSC). The model is capable of determining the number of downgraded market level to be activated, the location of manufacturing and treatment facilities, as well as the optimal product flow. Cannibalisation effects related to the demand of new and recovered products are considered and the improved version of augmented epsilon-constraint (AUGMECON2) method is employed to solve the proposed mathematical model.Computational results illustrate the encouraging potential related to the model and its suitability to deal with strategic decision-making problems