Inventory and fleet purchase decisions under a sustainable regulatory environment

Abstract

ABSTRACTThis work studies the direct impacts of environmental policies on logistics practices. Specifically, the authors estimate the potential changes in inventory and fleet purchase decisions under a set of policies designed to improve the environmental efficiency of transport activities, through a reduction of overall transportation emissions; and requirements for a fleet mix to include zero and near-zero emission vehicle technologies, or, minimum vehicle type shares. The work introduces a constrained stochastic multi-objective joint replenishment problem (S-MJRP) to evaluate the policies while considering logistics costs and emissions as objectives. Moreover, the authors developed a solution algorithm and conducted empirical analyses. The results highlight the trade-off between capital investments in zero-emission vehicles and the logistics costs required to abide by the requirements of the mentioned regulatory policies. The results provide insights for both private and public stakeholders as they consider the logistics challenges and opportunities generated by these sustainability policies.