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Sustainable inventory management with deteriorating and imperfect quality items considering carbon emission

Tiwari, Sunil, Daryanto, Yosef, Wee, Hui Ming
Journal of cleaner production 2018 v.192 pp. 281-292
carbon, energy, energy use and consumption, fuels, industry, inventories, models, profitability, social impact, transportation
Sustainable inventory management seeks to reduce the environmental and social impacts of an industry without affecting its profitability. This study presents an integrated single-vendor single-buyer inventory model for deteriorating items with the imperfect quality considering carbon emission. Carbon emission is the result of transporting, warehousing, and keeping the deteriorating items. Transportation emission depends on the vehicle's fuel consumption, the fuel emission, and the distance traveled. Warehouse emission depends on the total inventory and the warehouse energy consumption per unit item. The emission due to deteriorating item is related to its disposal. The purpose of this model is to provide policy-makers insights to collectively decide on the frequency and quantity of product delivery as well as the inventory level to minimize both the total inventory and carbon emission costs. This paper proposes a solution procedure and provides a numerical example to illustrate the theory. The findings suggested that the integrated model is superior both in term of the cost and the carbon emission reductions. Sensitivity analysis is given to illustrate the validity of the model.