Authors: Hossein Jandaghi; Abdul Sattar Safaei; Ali Divsalar
Addresses: Babol Noshirovani University of Technology, Babol, Iran ' Babol Noshirovani University of Technology, Babol, Iran ' Babol Noshirovani University of Technology, Babol, Iran
Abstract: Vendor-managed inventory becomes an essential trend in logistics. Inventory routing problem (IRP) is one of the most critical problems in this context. In practice, any distribution plan in an IRP may cause CO2 emission produced by the vehicles. In this research, an optimisation model is developed to handle both the conventional inventory routing problem and its environmental impacts. The problem is modelled as a bi-objective variant of the IRP. The two objective functions considered in this research are minimising the total inventory cost, as well as minimising fuel consumption and CO2 emissions. The fuel consumption is determined based on vehicle load, travelled distance, vehicle speed and vehicle technical characteristics. A bi-objective mixed-integer linear model is developed and the ε-constraint approach is utilised to solve its randomly generated instances. Furthermore, numerical tests for instances of the problem are performed using the Cplex optimisation software to quantify benefits of using comprehensive goal function with two different objectives. In general, it is shown that the company should stock more inventories, respecting to the green aspect. Moreover, a comprehensive sensitivity analysis performed to show the impact of each parameter of the problem on both model complexity and managerial insights.
Keywords: inventory-routing problem; bi-objective; green supply chain; fuel consumption; CO2 emission; ε-constraint.
International Journal of Applied Decision Sciences, 2021 Vol.14 No.3, pp.321 - 342
Received: 30 Oct 2019
Accepted: 27 Dec 2019
Published online: 12 May 2021 *