Implementing Servitization Model to Calculators: The Multi-Faceted Sustainability Impact of Closing The Loop

Abstract

This study considers implementing servitization models in closing the loop for the in-campus calculators’ supply chain. Substituting the selling model with the pay-per-use model sells only the functionality of devices with its several implications. First, access to multiple end-users extends the per capita operational lifespan of the calculators. Following, logistics costs, including the environmental burden of extracting rare earth elements consumed in production, are reduced by decreasing redundancy. Moreover, the reuse of devices suggests an efficient and implicitly costless flow of material. Introducing a stochastic process description of the problem, we facilitate a Monte Carlo simulation to estimate the multifaceted decisions involving multiple criteria. Deciding the mode of delivery and returns, inventory level, and effect of pricing on the cash flow helps estimate material flow costs, financial aspects, and environmental relief. In light of the analyses, we also provide the potential environmental implications and discuss further expansions to the proposed model.

Keywords

• Servitization
• Rare earth elements
• Closed-loop supply chain
• Monte Carlo simulation
• Gaussian binomial mixture

Hesap Makinelerinde Hizmetleştirme Modelinin Uygulanması: Döngüyü Kapatmanın Çok Yönlü Sürdürülebilirlik Etkisi

Abstract

This study considers implementing servitization models in closing the loop for the in-campus calculators’ supply chain. Substituting the selling model with the pay-per-use model sells only the functionality of devices with its several implications. First, access to multiple end-users extends the per capita operational lifespan of the calculators. Following, logistics costs, including the environmental burden of extracting rare earth elements consumed in production, are reduced by decreasing redundancy. Moreover, the reuse of devices suggests an efficient and implicitly costless flow of material. Introducing a stochastic process description of the problem, we facilitate a Monte Carlo simulation to estimate the multifaceted decisions involving multiple criteria. Deciding the mode of delivery and returns, inventory level, and effect of pricing on the cash flow helps estimate material flow costs, financial aspects, and environmental relief. In light of the analyses, we also provide the potential environmental implications and discuss further expansions to the proposed model.

Keywords

• Servitization
• Rare earth elements
• Closed-loop supply chain
• Monte Carlo simulation
• Gaussian binomial mixture

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