ABSTRACT
The focus of this issue is to help companies select and produce only those new products for which revenues in the closed-loop supply chain are expected to be higher than the costs. In this chapter, a cost-benefit function is formulated and then used to perform a multicriteria economic analysis for selecting an economical new product to produce in a closed-loop supply chain. The costbenefit function can be defined as the ratio of the equivalent value of benefits associated with the object of interest to the equivalent value of costs associated with the same object. The equivalent value can be present worth, annual worth, future worth, etc. In this case, the object of interest is the new product to be produced in a closed-loop supply chain. The cost-benefit function (F) is formulated as
F B
C = (12.1)
where B represents the equivalent value of the benefits (revenues) and C represents the equivalent value of the costs. An F value greater than 1.0 indicates that the object is economically advantageous. A notable point here is that due to uncertainties in supply, quality, and disassembly times in the reverse flow of the product (as a used product) in the closed-loop supply chain, decision makers must rely on experts’ knowledge to obtain imprecise data for calculating B, C, and F values. Hence, fuzzy logic is used in the model presented in this chapter, and the cost-benefit function will hereafter be referred to as fuzzy cost-benefit function.
