Impact of smart energy on a three-echelon closed-loop supply chain management with reduction of carbon emissions

The effective management of energy consumption and the reduction of emissions are crucial to sustainable supply chain management. Sustainability can be approached in a new way through smart energy. Smart energy combines traditional and renewable energy sources through a smart system that is more efficient than conventional energy for sustainability. The model creates a closed-loop supply chain management for tires production to find the efficiency of smart energy utilization and the remanufacturing of end-of-life tires to achieve the sustainability goal. The model determines the policy for using smart energy by finding the ratio of renewable to traditional energy. The players include a manufacturer, multiple retailers, and third-party logistics that consume energy for production and management. The manufacturer follows a manufacturing-remanufacturing strategy to produce new and remanufactured tires and supplies those tires to all retailers by following an optimal delivery schedule. The formulated profit function of the developed model is a mixed-integer nonlinear function. A classical optimization method is used to solve the model. The most important finding is that using 42% smart energy increases total profit by 12.71% and pulls down emissions by 41.98%. A mixed production strategy with variable remanufacturing earns 13.91% more profit.