In this paper we investigate a manufacturer's sustainable sourcing strategy
that includes recycled materials. To produce a short life-cycle electronic good,
strategic raw materials can be bought from virgin material suppliers in advance of
the season and via emergency shipments, as well as from a recycler. Hence, we take
into account virgin and recycled materials from different sources simultaneously.
Recycling makes it possible to integrate raw materials out of steadily increasing
waste streams back into production processes. Considering stochastic prices for
recycled materials, stochastic supply quantities from the recycler and stochastic
demand as well as their potential dependencies, we develop a single-period
inventory model to derive the order quantities for virgin and recycled raw materials
to determine the related costs and to evaluate the effectiveness of the sourcing
strategy. We provide managerial insights into the benefits of such a green sourcing
approach with recycling and compare this strategy to standard sourcing without
recycling. We conduct a full factorial design and a detailed numerical sensitivity
analysis on the key input parameters to evaluate the cost savings potential. Furthermore,
we consider the effects of correlations between the stochastic parameters.
Green sourcing is especially beneficial in terms of cost savings for high demand
variability, high prices of virgin raw material and low expected recycling prices as
well as for increasing standard deviation of the recycling price. Besides these
advantages it also contributes to environmental sustainability as, compared to
sourcing without recycling, it reduces the total quantity ordered and, hence, emissions
are reduced.
| Identifer | oai:union.ndltd.org:VIENNA/oai:epub.wu-wien.ac.at:5512 |
| Date | 09 1900 |
| Creators | Rogetzer, Patricia, Silbermayr, Lena, Jammernegg, Werner |
| Publisher | Springer Nature |
| Source Sets | Wirtschaftsuniversität Wien |
| Language | English |
| Detected Language | English |
| Type | Article, PeerReviewed |
| Format | application/pdf |
| Rights | Creative Commons: Attribution 4.0 International (CC BY 4.0) |
| Relation | http://dx.doi.org/10.1007/s10696-017-9288-4, http://link.springer.com/, http://epub.wu.ac.at/5512/ |
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