Integrating Economic and Environmental Aspects in the Design and Planning of Supply Chains: Two alternative methodologies

Abstract

The design of supply chains has been mainly focused on economic indicators. However, as social and environmental concerns grow in society it has become clear that such aspects also need to be accounted when designing supply chains. Thus investment towards logistics structures that consider both economic and environmental performance is nowadays an important research topic. This paper address such topic and studies the design and planning of multi-product supply chain networks (SCN), while accounting simultaneously with economic and environmental aspects. The latter are modeled through the use of the Life Cycle Assessment (LCA). On the LCA two methodologies are studied, the Eco-Indicator 99 and the Environmental Priority Strategies (EPS). The optimization of the SCN is performed through a mixed integer linear programming (MILP) formulation. The model is constructed based on the Resource-Task-Network (RTN) where the applicability of the Eco-indicator 99 and the EPS methodologies are considered. The results obtained are analyzed using different objective functions (economic, environmental and mixed).