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March 25, 2005
Design for Global Design for Global SustainabilitySustainability
Spring 2005 UMASS AmherstSpring 2005 UMASS Amherst
Operations Research / Management Operations Research / Management Science Seminar SeriesScience Seminar Series
Fuminori ToyasakiFuminori Toyasaki
Virtual Center for Supernetworks
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OverviewOverview
1. Background
2. Motivation
3. Previous Studies
4. E-cycling
5. Conclusion
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BackgroundBackground
500 million PCs will be obsolete by 2007 in the U.S. (Appelbaum, 2002).
About 9,000 tons of electric products are scrapped per year in Japan (Shimizu, 2002).
In Europe, electronic waste is estimated to reach 12 million tons by 2010 (Shneiderman, 2004).
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BackgroundBackground
The US will face a “tsunami” of e-waste (Silicon Valley Toxics Coalition, 2004)
E-waste Tsunami(Source: Electronic Design April
12, 2004)
0
50
100
150
200
250
300
86 92 98 04 10 16
Year
Mil
lio
ns
of
ton
s
StorageRecycledLandfilled
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BackgroundBackground
Characteristics of E-waste
High product volumes and short product lives- Depletion of landfill and incineration capacities
Toxic materials and precious metals- Smelting precious metals and disposing
hazardous materials- Problem of exporting hazardous materials to
developing countries
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Motivation for Study of Reverse Motivation for Study of Reverse Supply Chains Supply Chains
Depletion of landfill and incineration capacities Legislative Pressure (EU and Japan)
WEEE and RoHS (EU), Prevent Mercury Emissions (Maine, USA), Proposition 65 (California, USA), Computer and Electrical Appliances Recycling Law (Japan)
Ecological Motivation Power of green consumers
Economic Motivation (US) Remanufacturing machine parts Smelting precious metals US companies are losing $ 100 billion annually
(Guide and Harrison, 2003).
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BackgroundBackground
Framework Closed Loop Supply Chain Network
Consumers
Producers
RetailersSuppliers
Materials
Recyclers
Processors
Disposal
Regulations Regulations
Source: Quality-based material selection for consumer electronics closed-loop supply chain networks under uncertainty, 2005
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UncertaintiesUncertainties
Material Choice Uncertainties Supply and quality of recycled materials Uncertainty about the amount, quality, and timing of
returned e-waste Material toxicity
Regulatory Uncertainties What specific environmental laws will be enacted in
each country and how similar are they? Are companies complying with applicable regulations?
Consumer Demand Uncertainty Uncertainty about consumers’ willingness to pay for the
recycled materials.
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Previous StudiesPrevious StudiesSeparate Reverse Flow Model
Integration of Forward and Reverse Logistic Model
Forward Flow Model (Green
Logistics)
Decentralized Supply ChainNetwork Modeling
Nagurney andToyasaki (2005) and Stuart et al. (1999)
Nagurney andToyasaki (2003)
Industrial Organization Models
Savaskan et al. (2004)
Debo, Toktay, and Van Wassenhove (2004)
Environmental Risk Analysis
Qiu et al. (2001)
Regulatory Economics
Hill (1997)
Queuing Network
Toktay, Wein and Zenios (2000)
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Reverse Logistics Model : E-cyclingReverse Logistics Model : E-cycling
Nagurney A. and Toyasaki F. (2005) “Reverse Supply Chain Management and Electronic
Waste Recycling: A Multitiered Network Equilibrium Framework for E-Cycling”
Transportation Research E 41, 1-28.
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AssumptionsAssumptions
Decentralized reverse logistics model
Oligopsony market (imperfect competition in input market)
The prices and material flows are endogenously determined.
The sources generate a fixed amount of electronic waste
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The 4-Tiered E-Cycling NetworkThe 4-Tiered E-Cycling Network
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A Source’s BehaviorA Source’s Behavior
Each source of e-waste:Minimizes total cost associated with his management of e-waste
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A Recycler’s BehaviorA Recycler’s Behavior
Each recycler:Maximizes his profit
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A Processor’s Behavior
Each processor:Maximizes his profit
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The Demand Markets
For all processors njj ,...,1;
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Variational Inequality Formulation
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E-Cycling Network for the E-Cycling Network for the Numerical ExamplesNumerical Examples
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Common Input DataCommon Input Data(Low Demand for Recycled Materials(Low Demand for Recycled Materials
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Results in Case of Low Demand Results in Case of Low Demand for Recycled Productsfor Recycled Products
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Results in Case of Low Demand Results in Case of Low Demand for Recycled Products (Cont.)for Recycled Products (Cont.)
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Common Input Data (High Demand for Recycled
Materials)
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Results in Case of High Demand Results in Case of High Demand for Recycled Productsfor Recycled Products
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Results in Case of High Demand Results in Case of High Demand for Recycled Products (Cont.)for Recycled Products (Cont.)
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ConclusionConclusion
In the EU and Japan, pressure from legislation and other members in the system leads companies to integrate reverse logistics into their business model.
In the US, companies have become interested in reverse logistics due to economic reasons.
Reverse logistics has many uncertainties: material choice, legislation, and consumer demand uncertainties.
A new type of supply chains, closed-loop supply chains, needs to be considered.
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March 25, 2005
Thank you
Questions, Comments ?
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