An analytical model of Circular Supply Chains

In the current global scenario where sustainability and resource efficiency are becoming increasingly important, it is necessary for production and distribution systems to embrace the Circular Economy paradigm and change their approach towards waste and resource usage. This trend has led to the development of Closed-Loop Supply Chains or Industrial Symbiosis networks, among others, as powerful strategies to move towards the Circular Economy. However, the impact of these circular strategies on the dynamic behavior of the supply networks is still unclear. Hence, our study aims to explore the dynamics of a supply chain where both Closed-loop Supply Chains and Industrial Symbiosis are implemented. More specifically, our study focuses on quantifying the bullwhip effect in a Circular Supply Chain by deriving analytical equations that formalize the fluctuations in the orders issued by different echelons in the supply chain. This analysis serves to highlight the main factors influencing Circular Supply Chains performance, that are the waste rate, the return rate and the ratio between the final customer demands of the two supply chains involved in the model.