Designing a Closed-Loop Supply Chain Network for Electronics: Role of Discount Offers in Enhancing Product Returns and Reducing Costs

The rapid growth of electronic products has intensified concerns over end-of-life (EoL) waste, prompting the adoption of Closed-Loop Supply Chain (CLSC) systems that integrate forward and reverse logistics. In this context, economic incentives such as discount offers are considered effective strategies to stimulate consumer participation in returning used products. This study aims to analyze the effect of discount offers on the return rate and total cost in a CLSC network for printers. A cost minimization model was developed and solved using Microsoft Excel Solver, considering multiple cost components including manufacturing, remanufacturing, transportation, handling, storage, inspection, waste treatment, and consumer discounts. The results show that manufacturing accounts for the largest share of total cost (66.9%), followed by delivery from manufacturer to distribution center (13.81%), while discount offers, though only contributing 1.35%, play a key role in increasing return rates. The optimal discount combination of $10 for Product 1 and $15 for Product 2 resulted in a return rate of 14% and 20%, respectively, with a total cost of $23,633. Sensitivity analysis reveals that although higher discounts lead to increased return rates, they also raise total costs, highlighting the importance of determining the optimal level of incentives to ensure both sustainability and cost efficiency in CLSC network design.