Optimizing environmental and economic impacts in supply chains in the FMCG industry

Abstract

In this paper, the environmental impacts of a supply chain of a Fast Moving Consumer Goods (FMCG) company are considered. The environmental impacts are evaluated using the Eco-indicator 99. In the optimization of the tactical planning decisions both the environmental impacts and the total costs are considered using the ε-constraint method for identifying a set of Pareto-optimal solutions. For a case study containing 10 Stock-Keeping Units (SKUs), which was optimized with a 1% optimality tolerance, the environmental impacts could be reduced by 2.9% without increasing the total costs. A further reduction of environmental impacts of up to 6.3% was possible at an increase in total costs of 5.2%. An SKU decomposition algorithm was applied to optimize a larger case study containing 100 SKUs.