Profitable Circularity by Design: An Integrated MILP–LCA Framework for Indian Electronics under Extended Producer Responsibility

Abstract

This paper develops and evaluates a decision framework that embeds circular-economy logic into production planning and closed-loop supply chain design for an Indian electronics manufacturer. The framework integrates life-cycle assessment directly into a mixed-integer linear optimization model, co-determining facility siting, reverse logistics, and inventories while enforcing environmental limits on carbon and resource intensity. The design operationalizes modular product architecture, quality grading of returns (A-grade to remanufacturing, B-grade to recycling), and material valorization. Scenario experiments compare a linear baseline with Extended Producer Responsibility (EPR)–compliant and high-circularity configurations, calibrated to realistic Indian take-back conditions. The article’s contribution is an integrated MILP–LCA framework that endogenously computes life-cycle impacts within the supply network design, linking modular product architecture, graded return routing, and material valorization to facility siting and reverse logistics under India’s EPR regime. Circular designs deliver dual dividends: up to 25% lower annual net operating costs (after valorization) and 41% less virgin material use compared to the baseline. Sensitivity analyses show that, at moderate circularity, take-back and remanufacturing yield behave as near substitutes, whereas higher ambition introduces convex trade-offs that justify discrete reverse-capacity investments. The results provide a phased, managerially actionable pathway to profitable and auditable circular operations under contemporary Indian policy.