Opportunistic versus life-cycle-oriented decision making in multi-loop recovery: an eco-eco study on disposed vehicles

Abstract

Purpose Multinational companies have recently been encouraged by government policies to implement Extended Producer Responsibility. One objective is to stimulate high-level recovery, and the other is to introduce life cycle thinking. This paper studies decision making in recovery, comparing opportunistic decision making with short-term profit maximization (usually leading to one loop) versus a life-cycle perspective (leading to multiple loops). The question is (1) which business benefits this brings as well as reduction of environmental impact and (2) whether companies should be inclined to think multi-loop and if so how governments could stimulate this. Methods After comparing the problem with the literature, a non-linear optimization model is presented optimizing NPV of revenues and calculating environmental impact with cumulative energy demand and cumulative recovery rates. The environmental indicators chosen are motivated based on literature research in the area of streamlined LCA. Sensitivity analysis tests solutions on various sources of uncertainty. We study a real-life case with real data. Results and discussion Based on the results, we can formulate the following insights for industry. Firstly, cascade markets for reuse may appear attractive but new sales cannibalization compromised margins. To neutralize this effect, returns should be remanufactured to equal-to-new quality hence no difference should exist between new and recovered items. Companies must suppress their natural

From Legal Transplants to Sustainable Transition

“…On the one hand, advocates of the EPR principle, who were not satisfied with the compromise in the way of collective responsibilities in practice giving little incentives for innovation and design improvements, suggested deliberate redesign of regulations based on the notion of individual responsibility (Atasu et al 2010;Clift and France 2006;Mayers et al 2011;Rossem et al 2006). On the other hand, critics emerged regarding the high transaction costs and unintended direction of technological change in practice due to complexity in management and regulations in the name of EPR (Krikke 2010;Lauridsen and Jorgensen 2010;Sachs 2006).…”

Adaptation of the Product Structure-based Integrated Life cycle Analysis (PSILA) technique for carbon footprint modelling and analysis of closed-loop production systems

“…Therefore, a transition in the way products are being designed and manufactured across the whole supply chain is needed. In making this transition, there are numerous reports and articles highlighting the importance of adopting a circular business model -whereby there is a minimisation and integration of wastes, by-products, and used goods back into the supply chain (Bonini and Bové, 2014;Ellen MacArthur Foundation, 2014;Krikke, 2011Krikke, , 2010Krikke et al, 2013;Stuchtey, 2013;Zoeteman et al, 2010).…”