DDMRP as Production Control Policy in a Two-Product Closed-Loop Supply Chain

Recently, closed-loop supply chains (CLSCs) are receiving growing attentions by the academic world since they represent a sustainable network for circular economies. However, the impact of production control policies (PCPs) on the performance of CLSCs is still unexplored. Then, this paper investigates the role of the Demand-Driven Material Requirements Planning (DDMRP) as a PCP in two-product CLSCs. The normal flow of the CLSC consists of factory and retailer nodes. The factory is characterized by a production line subject to failure events and product changeovers. The retailer issues orders to the factory through the Smoothing Order-Up-To policy and meets the customer demand. The reverse flow is represented by the remanufacturer that collects and restores the two product types coming from the customer. DDMRP is adopted by the factory node to decide what product type has to be processed. A full-factorial Design of Experiments was defined, and ANOVA was carried out to investigate the impact of remanufacturer and control parameters of DDMRP on the fill rate of the whole closed-loop supply chain. This paper allows investigating how the parameters regulating the DDMRP bias the responsiveness of two-product CLSC with capacity restrictions.