The impact of reverse logistics in green supply chain management: a system dynamics analysis

The reverse logistics paradigm plays an important role in improving the environmental, social and economic performance of the green supply chain. However, incorporating reverse logistics in green supply chain management (GSCM) strategy is not a trivial task. The present paper seeks to (1) identify key performance measures for green supply chains, (2) identify causal linkages between important variables in a typical supply chain, and to (3) develop a dynamic simulation model for developing appropriate green policies and strategies when translating from reverse logistics to green supply chain. Based on system dynamics (SD) principles, the impact of key variables on the performance of the green supply chain system is simulated and analysed. Results from what-if analysis indicate that, in the medium to long term, a cautious approach to investment on green strategies is essential if environmental, economic and social performance benefits are to be realised. The results demonstrate that the model provide sound managerial insights.

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