Title: Internalisation strategies of external costs of transport for a sustainable logistics

Authors: Salvatore Digiesi; Giuseppe Mascolo; Giorgio Mossa; Giovanni Mummolo

Addresses: Department of Mechanics, Mathematics and Management, Politecnico di Bari, Viale Japigia 182, 70126 Bari, Italy ' Department of Mechanics, Mathematics and Management, Politecnico di Bari, Viale Japigia 182, 70126 Bari, Italy ' Department of Mechanics, Mathematics and Management, Politecnico di Bari, Viale Japigia 182, 70126 Bari, Italy ' Department of Mechanics, Mathematics and Management, Politecnico di Bari, Viale Japigia 182, 70126 Bari, Italy

Abstract: Transport is a priority issue for a sustainable development. The European Commission planned to implement a full and mandatory internalisation of the transport external costs within the 2020 (EU, 2011). Traditional inventory models, however, minimise logistics costs neglecting externalities. The aim of this paper is to evaluate the social and environmental benefits of the internalisation of the external costs in the inventory management problem. The sustainable order quantity model (Digiesi et al., 2012) has been adopted here in order to identify the optimal lot-size and transportation mean minimising logistic and external costs of transport. A sensitivity analysis has been performed in order to investigate the effects of different internalisation strategies on the solution of the inventory problem. In order to evaluate the effectiveness of the proposed strategies, they have been tested on a real case study.

Keywords: external costs; internalisation strategies; sustainable order quantity; SOQ; inventory management; transport costs; sustainable logistics; sustainability; sustainable development; logistics costs; inventory modelling; social benefits; environmental benefits; lot sizing.

DOI: 10.1504/IJPQM.2016.076709

International Journal of Productivity and Quality Management, 2016 Vol.18 No.2/3, pp.238 - 257

Available online: 23 May 2016 *

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