<p>The circular economy represents an economic framework that contrasts with the traditional linear economy by emphasizing closed-loop systems in which resources are continuously reused, recycled, and regenerated. This study presents a dynamic model of the circular economy, focusing on the interaction between production and waste generation. The existence and uniqueness of the model solution are established through analytical investigation. The formulated model is examined both analytically and numerically within the framework of dynamical systems. A delay parameter is incorporated to represent a policy mechanism for controlling production rates and minimizing waste. Analysis of the system under varying delay conditions reveals that moderate delays can effectively reduce waste, whereas excessive delays may induce chaotic dynamics, potentially destabilizing the system. These findings underscore the need for precise calibration of policy interventions to maintain a balance between economic productivity and environmental sustainability. The theoretical results are further validated through numerical simulations performed using MATLAB software, providing insights that may inform the design of regulatory frameworks promoting sustainable production practices and efficient resource management in a circular economy.</p>