Two-stage single period inventory management for a manufacturing vendor under green-supplier supply chain

Abstract

The newsboy problem (NP) has numerous applications for decision making in logistics and industrial systems. This paper presents a novel and practical two-stage NP in a green supply chain for a manufacturing vendor in case that in addition to the finished products, raw materials are provided at the start of the selling period. In this case, they may needed to be manufactured in order to produce the required finished products during the selling period. This paper tries to integrate the proposed two-stage NP and a supplier selection problem under a single-sourcing strategy. In the green supply chain, the vendor should select appropriate suppliers to purchase the raw materials and finished products. Moreover, it is assumed that the vendor has several vehicle types that can dispatch them to ship the purchased raw materials from the selected suppliers. However, to emphasize on the green approach as well as to create a green supply chain, a limitation on total greenhouse gas emissions of the selected vehicles is considered. The objective is to maximize the expected total vendor’s profit under three scenarios with respect to the total cost of supplier selection and the total transportation cost of vehicles subject to the budget and storage space constraints. Finally, by using GAMS software, some numerical experiments are presented to demonstrate the applicability of the proposed model. Sensitivity analyses on the impact of supplier and vehicle selection, and green transportation are conducted to provide more insights as well.