Track: Sustainability in Supply Chain, Enterprise Operations and Strategies

Abstract

In this paper, we study an integrated inventory model for a single-vendor and a single-buyer considering environmental issues. The carbon emissions generated by both parties and involving the third-party logistics (TPL). A TPL collects the product in the vendor’s warehouse and sends to the buyer’s warehouse using an electric vehicle. The lead-time depends on the time of production, transportation, loading-unloading, and in-transit. We adopt Wangsa et al. (2020)’s algorithm to find the optimal decision variables, i.e., the order quantity, number of shipments, safety factor, lead-time, and total emission quantity. We construct and compare two cases, namely the fossil fuel-equipment based on model of Wangsa et al. (2020) and the electric-powered model in the numerical example section. From the comparison of the result, we conclude that the integrated total cost under the electric-powered is lower than the fossil fuel-equipment with cost saving around 13-14%.