Eco-efficient based logistics network design in hybrid manufacturing/ remanufacturing system in low-carbon economy

Purpose: Low-carbon economy requires the pursuit of eco-efficiency, which is a win-win situation between economic and environmental efficiency. In this paper the question of trading off the economic and environmental effects embodied in eco-efficiency in the hybrid manufacturing/remanufacturing logistics network design in the context of low-carbon economy is examined. Design/methodology/approach: A multi-objective mixed integer linear programming model to find the optimal facility locations and materials flow allocation is established. In the objective function, three minimum targets are set: economic cost, CO2 emission and waste generation. Through an iterative algorithm, the Pareto Boundary of the problem is obtained. Findings: The results of numeric study show that in order to achieve a Pareto improvement over an original system, three of the critical rates (i.e. return rate, recovery rate, and cost substitute rate) should be increased. Practical implications: To meet the need of low-carbon dioxide, an isoCO2 emission curve in which decision makers have a series of optimal choices with the same CO2 emission but different cost and waste generation is plotted. Each choice may have different network design Journal of Industrial Engineering and Management – http://dx.doi.org/10.3926/jiem.665 201 but all of these are Pareto optimal solutions, which provide a comprehensive evaluation of both economics and ecology for the decision making. Originality/value: This research chooses carbon emission as one of the three objective functions and uses Pareto sets to analyze how to balance profitability and environmental impacts in designing remanufacturing closed-loop supply chain in the context of low-carbon economy.