Low carbon logistics: Reducing shipment frequency to cut carbon emissions

Shaolong Tang, Wenjie Wang, Hong Yan, Gang Hao

Research output: Journal article publicationJournal articleAcademic researchpeer-review

52 Citations (Scopus)

Abstract

This study examines the issue of cutting emissions by reducing shipment frequency within the framework of periodic inventory review system, which is one of the most popular inventory control systems in practice. We first formulate a benchmark model to represent the Business-As-Usual scenario then further develop this model into a carbon emission reduction model by adding a constraint that represents the emission reduction percentage target. Because of the non-convexity of general models, we simplify our two general models into special cases and develop their propositions analytically. We then conduct comprehensive numerical experiments on the general models. Our findings suggest that by reducing shipment frequency and adjusting inventory control decisions in a periodic review system, a firm could meet a moderate emission reduction target with limited impact on total cost. Our results also show that cost associated with emission reduction is related to unit backorder cost and leadtime, while the common belief that a higher unit holding cost would lead to higher cost for emission reduction is not supported. To the best of our knowledge, no prior research has yet addressed carbon reduction considerations within the framework of periodic review inventory systems. This study provides insights in understanding in what ways the adjustment of inventory control decisions could lead to reducing carbon emissions in logistics.
Original languageEnglish
Pages (from-to)339-350
Number of pages12
JournalInternational Journal of Production Economics
Volume164
DOIs
Publication statusPublished - 1 Jan 2015

Keywords

  • Logistics
  • Low carbon
  • Periodic review system
  • Stochastic inventory model

ASJC Scopus subject areas

  • Industrial and Manufacturing Engineering
  • Business, Management and Accounting(all)
  • Management Science and Operations Research
  • Economics and Econometrics

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