Technical note on “Inventory management in supply chains with consideration of Logistics, green investment and different carbon emissions policies”

Abstract

This study presents an extension of the model proposed by Huang et al. (2020), which investigated the effects of carbon policies and green technologies on the integrated inventory management of a two-echelon supply chain with consideration of carbon emissions during the processes of production, transportation, and storage. Specifically, since the inventory policy impacts on the economic and environmental performances of the supply chain, this study proposes a mathematical model for the integrated inventory management of the single-vendor single-buyer supply chain under a consignment stock policy. The aim is, thus, to highlight advantages and disadvantages of the consignment stock agreement with respect to the traditional policy based on the model proposed by Hill (1999). To compare the results, the same three carbon emissions policies are considered: i.e., limited total carbon emissions, carbon taxation, and cap-and-trade. The proposed model can assist firms in determining their optimal inventory policy (i.e., agreement, production quantity, delivery quantity, and green investment amount) with an aim of minimizing the supply chain costs under different carbon emissions policies.