Decision Sciences Volume 44 Number 1 February 2013 © 2012 The Author Decision Sciences Journal © 2012 Decision Sciences Institute INVITED PAPER Closed-Loop Supply Chains: A Critical Review, and Future Research* Gilvan C. Souza † Kelley School of Business, Indiana University, Bloomington, IN 47405, e-mail: gsouza@indiana.edu ABSTRACT In this article, I present a review and tutorial of the literature on closed-loop supply chains, which are supply chains where, in addition to typical forward flows, there are reverse flows of used products (postconsumer use) back to manufacturers. Examples in- clude supply chains with consumer returns, leasing options, and end-of-use returns with remanufacturing. I classify the literature in terms of strategic, tactical, and operational issues, but I focus on strategic issues (such as when should an original equipment man- ufacturer (OEM) remanufacture, response to take-back legislation, and network design, among others) and tactical issues (used product acquisition and disposition decisions). The article is written in the form of a tutorial, where for each topic I present a base model with underlying assumptions and results, comment on extensions, and conclude with my view on needed research areas. [Submitted: June 5, 2012. Revised: July 31, 2012. Accepted: August 7, 2012.] Subject Areas: Closed-Loop Supply Chains, Remanufacturing, Reverse Lo- gistics, and Sustainable Operations. INTRODUCTION In forward supply chains, the flow of material is unidirectional, from suppliers to manufacturers to distributors to retailers, and to consumers. In closed-loop supply chains (CLSCs) there are reverse flows of used products (postconsumer) back to manufacturers. As an example of CLSC, consider Cummins, the original equipment manufacturer (OEM) of diesel engines based in Columbus, Indiana, shown in Figure 1. Forward flows consist of new engines and/or engine parts (such as a water pump or a turbocharger), and reverse flows consist of used products, and remanufactured products. Remanufacturing is the process of restoring a used product, postconsumer use, to a common operating and aesthetic standard, which may involve upgrades to the original product’s functionality. For a diesel engine * A section of this article (“Tactical issues in CLSCs”) is adapted from a portion of an article published by INFORMS. Reprinted by permission, Souza, G., Closed-Loop Supply chains with Remanufacturing, Tutorials in Operations Research, 2008. Copyright 2008, the Institute for Operations Research and the Management Sciences, 7240 Parkway Drive, Suite 300, Hanover, MD 21076 USA. The author would like to thank the Associate and Senior Editors for valuable suggestions on a previous draft of this article. † Corresponding author. 7