Sustainable multi-product production planning in closed-loop supply chains: managing production defects, stochastic demand, returns, and carbon emission policies.

Abstract

This study develops a multi-product production planning model for closed-loop supply chains (CLSCs) by incorporating defective production, stochastic demand, product returns, and carbon emission policies. Defective production rates are represented using a beta distribution to capture manufacturing variability, while carbon emissions from both production and remanufacturing are considered to support sustainable decision-making. The model determines optimal production quantities and acquisition prices under environmental and operational constraints. The results show that the proposed framework improves production planning by jointly accounting for defect variability, remanufacturing decisions, and carbon emission regulations. The numerical analysis demonstrates that Product 1 performs better in terms of revenue and production resilience under carbon-related constraints, while Product 3 is more sensitive to changes in acquisition pricing. Sensitivity analysis further reveals that higher carbon prices reduce revenue and production quantities across the products, whereas stricter carbon cap regulations significantly influence production and pricing decisions. These findings indicate that integrating quality uncertainty and carbon policies into CLSC planning enhances managerial decision-making, supports cost-effective remanufacturing, and promotes environmentally responsible supply chain operations. The study provides useful insights for decision-makers seeking to balance profitability, quality control, product recovery, and environmental compliance in sustainable multi-product supply chains.