Affiliations: Opus College of Business, University of St. Thomas,
LaSalle Avenue, Minneapolis, MN, USA | Department of Management Studies, College of Business,
University of Michigan-Dearborn, Dearborn, MI, USA
Note: [] Corresponding author: Opus College of Business, University of
St. Thomas, Mail # TMH 343, 1000 LaSalle Avenue, Minneapolis, MN
55403-2005, USA. Tel.: +1 651 962 4350; E-mail: [email protected]
Abstract: The system dynamics (SD) modeling approach is used to study the
U.S., Japan and EU auto industries' closed loop supply chains. The objectives
of this study are to examine the impact on these three supply chains of:
government regulations; financial incentives for recycling, remanufacturing,
and salvage; the export of used cars; market pricing for remanufactured,
salvage and recycle materials on cash flows; and use of such materials for car
manufacturers and routine car maintenance and repair considering similarities and differences. Disposal of cars that have reached end of life phase in the
U.S., Japan and EU, as well as, the export of used cars by Japan to emerging
economies are examined. Base scenario analysis using car consumption data and
forecasts are explored. The SD model was also subjected to boundary conditions
tests for structural validity. Dynamic analyses of different market scenarios
for the U.S., Japan and EU auto industries' value chains are also conducted.
The study shows the impact of government regulations, financial incentives and
market pricing for remanufactured, salvage and recycle materials have a
positive, but differing impact on cash flows and use of such raw materials for
car manufacturers in these three market segments.
Keywords: Closed loop supply chain, reverse logistics, end of life vehicle (ELV) simulation modeling, sustinable manufacturing, remanufacturing, salvage
