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Towards Circular Economy Implementation: An agent-based simulation approach for business model changes
KTH, School of Industrial Engineering and Management (ITM), Production Engineering. ---. (Manufacturing and Metrology Systems)ORCID iD: 0000-0002-5826-8670
KTH, School of Industrial Engineering and Management (ITM), Production Engineering. ---. (Manufacturing and Metrology Systems)ORCID iD: 0000-0002-6590-7514
KTH, School of Industrial Engineering and Management (ITM), Production Engineering. ---. (Manufacturing and Metrology Systems)ORCID iD: 0000-0002-5960-2159
2017 (English)In: Autonomous Agents and Multi-Agent Systems, ISSN 1387-2532, E-ISSN 1573-7454Article in journal (Refereed) Published
Abstract [en]

This paper introduces an agent-based approach to study customer behavior in terms of their acceptance of new business models in Circular Economy (CE) context. In a CE customers are perceived as integral part of the business and therefore customer acceptance of new business models becomes crucial as it determines the successful implementation of CE. However, tools or methods are missing to capture customer behavior to assess how customers will react if an organization introduces a new business model such as leasing or functional sales. The purpose of this research is to bring forward a quantitative analysis tool for identifying proper marketing and pricing strategies to obtain best fit demand behavior for the chosen new business model. This tool will support decision makers in determining the impact of introducing new (circular) business models. The model has been developed using an agent-based modeling approach which delivers results based on socio-demographic factors of a population and customers’ relative preferences of product attributes price, environmental friendliness and service-orientation. The implementation of the model has been tested using the practical business example of a washing machine. This research presents the first agent-based tool that can assess customer behavior and determine whether introduction of new business models will be accepted or not and how customer acceptance can be influenced to accelerate CE implementation. The tool integrates socio-demographic factors, product utility functions, social network structures and inter-agent communication in order to comprehensively describe behavior on individual customer level. In addition to the tool itself the results of this research indicates the need for systematic marketing strategies which emphasize CE value propositions in order to accelerate customer acceptance and shorten the transition time from linear to circular. Agent-based models are emphasized as highly capable to fill the gap between diffusion-based penetration of information and resulting behavior in the form of purchase decisions.

Place, publisher, year, edition, pages
Springer, 2017.
National Category
Engineering and Technology
Identifiers
URN: urn:nbn:se:kth:diva-212057DOI: 10.1007/s10458-017-9365-9ISI: 000412341500005Scopus ID: 2-s2.0-85019120254OAI: oai:DiVA.org:kth-212057DiVA, id: diva2:1133430
Note

QC 20170816

Available from: 2017-08-15 Created: 2017-08-15 Last updated: 2017-10-31Bibliographically approved
In thesis
1. From resource efficiency to resource conservation: Studies, developments and recommendations for industrial implementation of circular manufacturing systems
Open this publication in new window or tab >>From resource efficiency to resource conservation: Studies, developments and recommendations for industrial implementation of circular manufacturing systems
2017 (English)Doctoral thesis, comprehensive summary (Other academic)
Abstract [en]

Manufacturing industry is under permanent pressure to maintain its economic growth and profitability as strong societal backbone. At the same time pressures of waste generation and resource consumption are increasing as result of manufacturing operations. Since manufacturing industry is one of the major consumers of natural resources it is therefore essential to reduce dependency on natural resources by decoupling economic growth from consumption. Resource efficiency approaches can improve the performance of production systems by reducing resource losses. However, the fundamental assumption at the basis of resource efficiency approaches is that resources are available infinitely. As a consequence, challenges of sustainability and resource scarcity remain inadequately addressed. The objective of this research is to develop analysis methods and decision support tools for manufacturing industry to facilitate its transition from linear production systems to circular manufacturing systems, which are economically viable and environmentally sustainable. The initial scope of study focuses on industrial resource efficiency assessment in production systems. Expanding the view to a manufacturing system perspective, the current research is explored with regard to circular manufacturing systems in the context of economic benefits, resource scarcity and waste generation. Systematic analysis methods and decision support tools are developed for industrial companies to facilitate the adaption of circular manufacturing systems. These developments are supported by industrial case studies. The analysis methods are to the largest extent based on agent-based simulation approaches. The tools are capable of assessing the economic and environmental impact of different business models, design strategies as well as supply chains settings. Moreover, the tools are able to determine whether introductions of new (circular) business models will be adopted by customers. One empirical market study is performed to investigate value propositions of a circular business approaches based on customer decisions.

Place, publisher, year, edition, pages
Stockholm: KTH Royal Institute of Technology, 2017. p. 97
Series
TRITA-IIP, ISSN 1650-1888 ; 17-08
Keywords
Circular economy, Circular manufacturing systems, Resource conservative manufacturing, ResCoM, Agent-based modelling, Multi-method modelling
National Category
Engineering and Technology
Research subject
Production Engineering
Identifiers
urn:nbn:se:kth:diva-212923 (URN)978-91-7729-489-4 (ISBN)
Public defence
2017-09-22, F3, Lindstedtsvägen 26, Stockholm, 10:00 (English)
Opponent
Supervisors
Funder
EU, FP7, Seventh Framework Programme
Note

QC 20170825

Available from: 2017-08-25 Created: 2017-08-24 Last updated: 2017-08-31Bibliographically approved

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