Impacts of capacity redundancy and process flexibility on risk mitigation in e-waste recycling supply chain management

Abstract

Recently Waste Electrical and Electronic equipment (WEEE) has become urgent environmental issues around the world. Generally, the e-waste recycling reverse supply chain (RSC) features higher uncertainties and complicated network structures, making the operation more difficult. Since the study on impact of hybrid uncertainty mitigation strategy in RSC is rare, we study the coupling effect of two strategies — capacity redundancy and process flexibility through the design of two hybrid strategies. A distributionally robust optimization model is proposed to handle both waste returns and resource yields uncertainties, and solved by a proposed Outer Approximation (OA) algorithm after an adaptive robust formulation. With numerical experiments based on real data implemented, our research finds conflict situation of using capacity redundancy and process flexibility strategies together. We also give guidelines for the use of hybrid strategies in RSC. We find that the optimal strategy changes as required service level increases. We also suggest moderate investment in capacity redundancy with long chain flexibility and resource centralization when applying hybrid strategy with optimal flexibility.