Including sustainability criteria into inventory models (original) (raw)
Related papers
2021
Department of Mathematics, Holy Cross College (Autonomous), Affiliated to Bharathidasan University, Tiruchirappalli-620002, India. Abstract: Mitigating carbon emission in inventory has become an important issue for companies. Nowadays, companies are looking for solutions to reduce the carbon emission due to carbon policies imposed by various regulatory bodies. Not only for regulations, ISO certification, business competitive and customer satisfaction also encourage organizations to adopt green practices in their supply chain. In this paper, we develop a new sustainable inventory model considering carbon emission function which includes different sources of pollution. A mathematical model is to determine the optimal order quantity and total cost of this system. A numerical example is illustrated to present the proposed model.
Advances in Production Engineering & Management, 2020
Supply chains in a global business environment operate within conflicting aspects. This research analyses correlation and interdependencies between inventory levels, costs and greenhouse gas emissions from replenishments within supply chain echelon. A simulation-based inventory optimisation conducted on 4000 experiments assumes the conditions of stochastic market demand, (R, s, S) inventory policy, target fill rates, predefined lead times and closing days constraint. It verifies the influence of operational and logistic decisions such as frequency of inventory replenishments or vehicle size selection on management objectives. Besides determining the best individual results for the objectives of minimum inventory levels, total costs and emissions , the overall best solutions in terms of three decision models-uniformly valued, cost-oriented and environmentally responsible model, were determined using multi-criteria decision-making methodology. These models are relevant for both scientific and practical managerial settings due to the evident lack of research simultaneously analysing inventory, cost and environmental performances of (R, s, S) policy. This study confirms that it is crucial in practice to perform an extensive simulation experiment analysis for each product to be able to determine its optimal settings. Inventory management software should have a direct influence on operational decisions in order to reduce costs or emissions within the same fill rate.
Recent Trends in Sustainable Inventory Models: A Literature Review
Sustainability, 2021
Greenhouse gas emissions are increasing global warming significantly, hence the need for manufacturing companies to include sustainability strategies in their supply chain to reduce emissions generated by their operations. This article aims to provide a systematic literature review on integrating sustainability issues into inventory management models to support scholars and practitioners in decision-making processes according to their market requirements. Thus, this paper discusses the most relevant papers published on inventory management topics that consider environmental criteria such as greenhouse gas emissions, ecological quality controls, unsold inventory, and fixed carbon costs. Therefore, we have extended the literature review to incorporate sustainability considerations in inventory models involving an industry’s environmental and social effects. As a result, in this article, a detailed analysis of the existing literature and related weaknesses provide meaningful discussion...
2018
Sustainability in material purchasing is a growing area of research. Goods purchasing decisions strongly affect transportation path flows, vehicle consolidation, inventory levels and related obsolescence costs. Within a global sourcing context, companies experience the need of new decision making approaches capable to consider a large variety of factors, also linked with society and environment. Environmental impact assessment has become a key requirement for materials purchasing and transportation decisions since global warming is a rising concern both in academic and industrial researches. In fact, it is well known that the freight transport industry is responsible for large amounts of carbon emissions contributing to global warming. In this paper, we initially analyse and compare the environmental economic policies established by the International Governments in relation to the carbon trading systems adopted. Then, we develop a multi-objective lot sizing approach useful in practi...
Modelling Sustainable Development Aspects within Inventory Supply Strategies
Modelling and Simulation in Engineering
Nowadays, inventory management is a tool that must be extended to cover all aspects of the supply chain (SC). One of these aspects is Sustainable Development (SD) which emphasizes the balance between economic well-being, natural resources, and society. As inventory involves the use of natural and economic resources, the integration of SD criteria is important for a more efficient and sustainable SC. In this work, the most important SD variables associated with inventory management were identified. These variables were integrated as cost elements within a nondeterministic inventory control model to include SD criteria within inventory supply strategies. Through the assessment of the proposed integrated model, it was determined that, although SD practices involve additional investments, specific practices such as reuse/recycling and government incentives can increase revenue and profits. This is important for the development of government and business strategies to perform sustainable...
Inventory Management Sustainability
International Journal of System Dynamics Applications
Inventory optimality is an option of energy utilization proportionality that can lessen carbon emanations and maximize profitability. This study proposes an inventory management model in which the stock volume is optimally decided to diminish energy per resource utilized in-other to reduce carbon emanations. This will likewise help in concluding renewal volume optimally. Consequently, the study utilized economic order quantity (EOQ) to decide inventory volumes in-other to decrease carbon emanations so as to augment profits of the inventory chain. Partial least square(PLS) was additionally utilized to examine the extent of inventory management frameworks on environmental sustainability. The study, therefore, shows its oddity and pertinency by utilizing economic order quantity(EOQ) and partial least square(PLS) to examine and optimize inventory respectively, as it gives a perspective of decreasing carbon emanations during inventory procedures.
A sustainable EOQ model: Theoretical formulation and applications
International Journal of Production Economics, 2014
Traditional inventory models involve different decisions that attempt to optimize material lot sizes by minimizing total annual supply chain costs. However, the increasing concern on environmental issues stresses the need to treat inventory management decisions as a whole, by integrating economic and environmental objectives. Recent studies have underlined the need to incorporate additional criteria in traditional inventory models in order to design "responsible inventory systems". This paper explores the integration of factors affecting the environmental impact within the traditional EOQ model and proposes a "Sustainable EOQ Model". All sustainability factors linked to the material lot size are analyzed from the beginning of the purchasing order to the end of its life inside the buyer plant. Thus, the environmental impact of transportation and inventory is incorporated in the model and investigated by an economic point of view. In particular internal and external transportation costs, vendor and supplier location and the different freight vehicle utilization ratio are considered in order to provide an easy-to-use methodology. The optimization approach is applied to representative data from industrial problems to assess the impact of sustainability considerations on purchasing decisions if compared with the traditional approaches. Finally, an illustration of the effect of using the new "Sustainable EOQ model" is presented and discussed.
Sustainable economic production quantity models for inventory systems with shortage
Journal of Cleaner Production, 2018
Recently, new economic order/production quantity models have shifted away from focusing only on economic issues and towards combined economic-environmental concerns because of sustainable development goals. Despite this shift, only a few works have addressed sustainable Economic Production Quantity (EPQ). The theoretical sustainable EOQ and EPQ models are basic models that ignore many real-life conditions such as the possibility of stock-out in inventory systems. In this paper, we develop four new sustainable economic production quantity models that consider different shortage situations. To find optimal values of inventory system variables, we solve four independent profit maximization problems for four different situations. These proposed models include a basic model in which shortages are not allowed, and when shortages are allowed, the lost sale, full backordering and partial backordering models can be selected by operations managers depending on the manufacturer's motivation to improve service levels. We have also proposed an algorithm for determining optimum values of the decision variables for these sustainable economic production quantity models. Finally, the formulated models are explained with some different examples and the obtained results have been analyzed and discussed. These results show that the sustainable economic production quantity with partial backordering model is a general and more realistic model that can be used in many real cases with a reasonable profit amount, compared with the three other proposed models.
Production-Inventory Models considering different Carbon Policies: A review
International Journal of Productivity and Quality Management, 2019
Mitigating carbon emissions in supply chains has become an important issue in the recent era. Recently, companies are looking for solutions to lessen carbon emissions associated with their supply chains mainly due to carbon policies imposed by different regulatory bodies. Apart from regulations, competitive advantage, ISO certification, customer satisfaction also influence organisations to adopt green practices in their supply chains. Production and inventory are two important aspects of supply chains, and they contribute to a significant amount of cost and emissions. Organisations try to optimise their production and inventory related activities with operational adjustments while operating under different carbon policies. Over the last couple of years, authors have incorporated different carbon policies while optimising supply chains, especially production-inventory policies. This paper presents a review of quantitative models on green production-inventory problems considering different carbon policies and ends with suggestions for future research.
Quantitative models for sustainable supply chain management: developments and directions
European Journal of Operational Research
Sustainability, the consideration of environmental factors and social aspects, in supply chain management (SCM) has become a highly relevant topic for researchers and practitioners. The applica¬tion of operations research methods and related models, i.e. formal modeling, for closed-loop SCM and reverse logistics has been effectively reviewed in previously published research. This situation is in contrast to the understanding and review of mathematical models that focus on environmental or social factors in forward supply chains (SC), which has seen less investigation. To evaluate developments and directions of this research area, this paper provides a content analysis of 134 carefully identified papers on quantitative, formal models that address sustainability aspects in the forward SC. It was found that a preponderance of the publications and models appeared in a limited set of six journals, and most were analytically based with a focus on multiple criteria decision making. The tools most often used comprise the analytical hierarchy process or its close relative, the analytical network process, as well as life cycle analysis. Conclusions are drawn showing that numerous possibilities and insights can be gained from expanding the types of tools and factors considered in formal modeling efforts.