Given the rapid growth of digital technologies, the use of information systems (ISs) is increasingly important for businesses positioned within the circular economy (CE). When designing an IS for such businesses, it is essential to simulate how the IS affects the life cycle (LC). However, existing research has not yet addressed this issue. For example, life cycle simulation (LCS) mods an LC and evaluates the economic profit and environmental impact of a product across its entire LC but does not explicitly model the IS and the effect from IS on LC is not simulated clearly. In this study, we propose a modeling method (E-DFD) and a simulation system (ISS) for modeling and simulating the IS. In the E-DFD and the ISS, we model and simulate an IS as a set of functions. Additionally, we propose a method that facilitates cooperation between IS simulations and LC simulations, allowing the effect of IS functions on LC to be evaluated. To validate the effectiveness of the ISS and the simulation method, we describe a case study that targets a new servitized business model with refrigerators. In the case study, we considered three patterns of LCs and two IS patterns with different functions for comparing the entire LCs and how the economic profit and environmental impact are changed depending on the difference in IS functions. In this case study, the IS and LC simulations identify how differences in IS functions affect the economic service provider’s profit, as well as the CO₂ emission from the entire LC. Although our simulation method covers the entire LC, the functions of the IS focused on the use process in the case study. Therefore, further case studies targeting the LC processes, except the use process, are important for future work. In addition, developing methods for modeling and simulating the economic and environmental aspects of an IS is required.

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