# Circular Economy Strategy Selection Through a Digital Twin Approach
## 2 Literature Review  
The concept of the CE has emerged as a transformative model aimed at addressing the inefficiencies of traditional linear economies. As described by [PERSON] et al. [19], CE represents an economic system that eliminates the \"end-of-life\" (EoL) concept for products, mainly through the application of the 3R paradigm: reduce, recover, recycle. It aims to minimize the use of resources and energy in production and consumption processes to reduce environmental impacts by extending products' life cycle (recover) or transforming EoL products into raw materials for new production cycles (recycle). The CE principles are applied in strategies like direct reuse, reconditioning, remanufacturing, and recycling. However, the implementation of these strategies in industrial environments is often very complicated. Firstly, the degree of difficulty of implementing the processes associated with these strategies increases with the desired quality and performance of the product. For example, reconditioning aims to return a product to a satisfactory working condition, with a lower overall performance and shorter expected lifespan than the original [6], while remanufacturing returns a used product into a state in which it has at least the same performance and lifespan of a new product [20; 21]. This makes remanufacturing the best strategy among the reuse strategies, but also the most complex, since it requires several operations, ranging from the complete disassembly of the product to reprocessing, reassembling, and testing. Additionally, these operations can be further complicated by the inherent uncertainties that EoL products have. In fact,each product entering in the CE loop has its own story of usage and inherent quality. Consequently, during the execution of the CE process, some unpredictable difficulties may arise, included unexpected hazards for workers during reprocessing [22] depending on the specific conditions of products. This creates uncertainty in the process flow and costs, and on the efficacy of product recovery [23]. Furthermore, there is still a low acceptance rate for products subjected to CE processes among customers, who perceive reused products as lower quality compared to new products, which is not adequately offset by a decrease in the purchase price [24]. These problems may reduce the incentive for stakeholders to invest in CE strategies, as they perceive the payback period of the investment to be very long. Despite these difficulties, entire industrial segments are starting to invest in transitioning towards a CE paradigm. Companies like Philips have adopted \"circular lighting\", offering light as a service where products are leased and components are reused or refurbished, significantly reducing waste. Similarly, IKEA has committed to becoming a circular business by 2030, focusing on designing products that can be repaired, reused, and recycled, while also introducing furniture rental services to extend product life cycles [25]. However, to make circularity profitable, companies must adopt opportune strategies for each operation in the process. For example, reverse logistics (RL) represents a cornerstone to realizing a profitable and environmentally friendly CE strategy, facilitating the return and recovery of products, components, and materials from end users back into the CE supply chain [26]. Without RL, circularity would not be possible. However, RL also represents a cost because it requires transportation means, infrastructures for collection points, labor for sorting materials, and incentives to end users to encourage product returns [27]. Hence, opportunely managing RL is pivotal for the effectiveness of the entire CE strategy. The same can be said for other operations in a CE strategy. Inspection evaluates the quality of EoL products to assess the convenience of applying a CE strategy and applying it appropriately, which can make the difference between profits and losses for a company [28].