Optimizing sustainable cocoa supply chains: A Closed-loop model considering a profit-sharing policy and value loss during storage

Abstract

Abstract In various cocoa-producing nations, cocoa stands as a vital commodity, serving as the generates significant waste in the form of husks, which could potentially be repurposed into organic fertilizers. Unfortunately, most existing studies on cocoa supply chains overlook the management of cocoa waste through a closed-loop supply chain (CLSC) framework. This study addresses this gap by presenting a comprehensive model for a cocoa CLSC system that considers value loss within the supply chain. Moreover, a profit-sharing strategy is introduced to foster sustained collaboration among stakeholders. Through the optimization of decision variables e.g. the size of transfer batch, this model aims to maximize total profit within the cocoa supply chain. The result shows that the optimal size of transfer batch is 459 units which leads to 44,782,000 IDR total profit. Additionally, by reusing cocoa husks as organic fertilizers within a closed-loop supply chain, this model also contributes to reducing environmental impact and promoting sustainability within the cocoa industry.