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Article

An Optimal Purchase Decision of Reusable Packaging in the Automotive Industry

1
College of Global Business, Korea University, 2511 Sejong-ro Sejong City 30019, Korea
2
Department of Industrial & Systems Engineering, Seoul National University of Science and Technology, 232 Gongneung-ro, Nowon-gu, Seoul 01811, Korea
3
Strategic Sourcing–Automotive, Illinois Tool Works, 9629 W 197th St, Mokena, IL 60448, USA
*
Author to whom correspondence should be addressed.
Sustainability 2019, 11(23), 6579; https://doi.org/10.3390/su11236579
Received: 9 September 2019 / Revised: 25 October 2019 / Accepted: 29 October 2019 / Published: 21 November 2019
(This article belongs to the Special Issue Optimal Decisions and Risk Assessment in Sustainable Supply Chains)
Among the many components of material delivery operations, packaging is one of the foundations of secure and cost-efficient on-time delivery. Current environmental concerns have increased the popularity of returnable packaging over disposable packaging. This study considers a supply chain in the automotive industry where a single supplier adopts returnable packages for delivery operations to a single recipient. If a returnable package is not available, then an expendable package will be used as a more expensive alternative. Thus, an investment decision on the number of returnable packages must be made prior to launching a returnable packaging system. Using the actual data from an automotive supply chain, this study conducts simulated experiments, under the uncertainty of future demand and required lead time of reverse logistics, to identify the optimal quantity of returnable packages. Sensitivity analysis is then performed by varying the assumptions on operation duration, demand variability, and lead time variability. In general, the results indicate that a greater initial purchase of returnable packages is desirable for longer operation duration, higher demand variability, and higher lead time variability. However, if operation duration is short and the uncertainty is high, then there may be little benefit in using reusable packages. These results generalize the findings from previous studies. This approach and solution can enhance reliable and efficient supply chain operations in the automotive industry and may be applied to other industries where packaging is important and expensive. View Full-Text
Keywords: reusable packaging; supply chain; simulation; optimization; stochastic demands; stochastic lead time reusable packaging; supply chain; simulation; optimization; stochastic demands; stochastic lead time
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MDPI and ACS Style

Na, B.; Sim, M.K.; Lee, W.J. An Optimal Purchase Decision of Reusable Packaging in the Automotive Industry. Sustainability 2019, 11, 6579. https://doi.org/10.3390/su11236579

AMA Style

Na B, Sim MK, Lee WJ. An Optimal Purchase Decision of Reusable Packaging in the Automotive Industry. Sustainability. 2019; 11(23):6579. https://doi.org/10.3390/su11236579

Chicago/Turabian Style

Na, Byungsoo, Min Kyu Sim, and Won Ju Lee. 2019. "An Optimal Purchase Decision of Reusable Packaging in the Automotive Industry" Sustainability 11, no. 23: 6579. https://doi.org/10.3390/su11236579

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