Effects of Preservation Technology Investment on Waste Generation in a Two-Echelon Supply Chain Model

Mehran Ullah, Biswajit Sarkar and Iqra Asghar
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Mehran Ullah: Department of Industrial & Management Engineering, Hanyang University, Ansan Gyeonggi-do 155 88, Korea
Biswajit Sarkar: Department of Industrial & Management Engineering, Hanyang University, Ansan Gyeonggi-do 155 88, Korea
Iqra Asghar: Department of Industrial & Management Engineering, Hanyang University, Ansan Gyeonggi-do 155 88, Korea

Mathematics, 2019, vol. 7, issue 2, 1-20

Abstract: This study develops an integrated production-inventory model for a two-echelon supply chain network with controllable probabilistic deterioration. The investment in preservation technology is considered a decision variable to control the deteriorated quantity of an integrated system. The objective of the study is to optimize preservation investment, the number of shipments and shipment quantity, so that the total cost per unit of time of the supply chain is minimized. The study proposes a solution method, and the results show that investment in preservation technology reduces the total supply chain cost by 13%. Additionally, preservation increases the lot size, thus increasing the production cycle length, which reduces the ordering cost of the system. Furthermore, this study shows that preservation leads to a reduction of solid waste from deteriorated products. Total deteriorated products reduced to 8 units from 235 units, hence, preservation generates positive environmental benefits along with economic impacts. The robustness of the proposed model is illustrated with a numerical example, sensitivity analysis, and graphical representations. Moreover, comparative study and managerial insights are given to extract significant insights from the model.

Keywords: preservation technology investment; refrigerated trucks; waste reduction; controllable probabilistic deterioration rate; supply chain management (search for similar items in EconPapers)
JEL-codes: C (search for similar items in EconPapers)
Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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