Track: Inventory Control
Abstract
This research develops a joint optimization model for a two-tier supply chain by involving a manufacturer and a retailer. We investigate the impact of investment in setup cost reduction and electric-powered equipment such as electric forklifts and trucks on the joint total cost. CO2 emissions are produced by both parties and transportation activities involving a logistics provider. The products at the manufacturer’s warehouse are collected by a logistic provider and delivered to the retailer’s warehouse by using the electric truck. We consider the lead-time that depends on the production time, transportation time, material handling time, and in-transit time. The goal is to minimize the joint total cost, which is to obtain the decision variables, such as the lot size, factor of safety, and the number of batches. A numerical example is provided to demonstrate the application of the proposed model. The result shows that the proposed model compared with Wangsa et al. (2020) can significantly affect cost-saving, increase service level, short lead-time, and reduce carbon emissions levels by 24.42%; 0.36%; 41.03%; and 29.41%, respectively.