Bi-Objective Inventory Policy with Comprehensive Environmental Factors Formulation and Service Level Constraints

Marco Giacomelli (), Francesco Pilati and Matteo Brunelli
Additional contact information
Marco Giacomelli: Deparment of Industrial Engineering, University of Trento, 38123 Trento, Italy
Francesco Pilati: Deparment of Industrial Engineering, University of Trento, 38123 Trento, Italy
Matteo Brunelli: Deparment of Industrial Engineering, University of Trento, 38123 Trento, Italy

Sustainability, 2024, vol. 16, issue 17, 1-18

Abstract: As firms and consumers engage with environmental issues, decisions for inventory control need to entail this perspective of sustainability. Most green inventory models employ methods such as carbon caps or taxes for dealing with environmental sustainability. This problem can be more generally tackled via an explicit estimation of the environmental drivers of maintaining inventory in a warehouse, paired with the economic perspective within a transparent multi-objective optimization framework. With this goal, this paper builds on a detailed estimation of environmental and cost factors for a continuous-review inventory policy. The bi-objective problem is tackled by keeping the objective functions separate. In particular, the modeling of greenhouse gas emission or cost performance factors for the inventory encompasses factors that can depend on the decision variables, taking into account aspects such as warehouse location, building characterization, energy usage, and transport requirements. The effects of the emission drivers on the multi-objective optimization decisions are analyzed, considering that the problem can be constrained by multiple service level measures. Stockout response can be multifaceted and different service level measures capture different aspects of inventory shortages, affecting the resulting efficient solutions differently. The results highlight the impact of aspects such as warehouse location and supply capacity on solutions for the multi-objective inventory problem. Managerial decisions are thus influenced by warehousing and supply attributes via a traceable link to specific cost and emission determinants.

Keywords: inventory management; sustainability; service level; multi-objective optimization (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2024
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://www.mdpi.com/2071-1050/16/17/7871/pdf (application/pdf)
https://www.mdpi.com/2071-1050/16/17/7871/ (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:gam:jsusta:v:16:y:2024:i:17:p:7871-:d:1474591

Access Statistics for this article

Sustainability is currently edited by Ms. Alexandra Wu

More articles in Sustainability from MDPI
Bibliographic data for series maintained by MDPI Indexing Manager ().