 Voluntary environmental effort under (s,S) inventory policy*Alain Bensoussan and Fouad El Ouardighi International Journal of Production Research, 2024, vol. 62, issue 1-2, 522-535 Abstract: Prior research on inventory control has been wide ranging, yet the environmental implications of an $ ({s,S} ) $ (s,S) inventory policy remain uninvestigated. This paper seeks to bridge the gap by characterising a firm’s voluntary environmental policy in the setup of an $ ({s,S} ) $ (s,S) inventory control policy. We suggest a mixed model structure wherein, due to the presence of fixed production costs, the inventory is determined continuously by sales and impulsively with ordering decisions obeying an optimal stopping process, while the uncertain sales process is controlled by continuous-time environmental goodwill-related decisions. We show that a firm should successively use voluntary environmental efforts to stimulate its sales when there is inventory and to increase backlogging to improve its production efficiency. Given the recurrent pattern of this policy, we conclude that voluntary environmental efforts under an $ ({s,S} ) $ (s,S) inventory control is not compatible with using these efforts as a means to generate ephemeral reputation insurance. Date: 2024 Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:taf:tprsxx:v:62:y:2024:i:1-2:p:522-535 Ordering information: This journal article can be ordered from DOI: 10.1080/00207543.2023.2242968 Access Statistics for this article International Journal of Production Research is currently edited by Professor A. Dolgui More articles in International Journal of Production Research from Taylor & Francis Journals |
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