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Inventory management under joint product recovery and cap-and-trade constraints

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Garcia-Alvarado, Marthy and Paquet, Marc and Chaabane, Amin and Amodeo, Lionel. 2017. « Inventory management under joint product recovery and cap-and-trade constraints ». Journal of Cleaner Production, vol. 167. pp. 1499-1517.
Compte des citations dans Scopus : 12.

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Abstract

The infuence of environmental legislation in inventory control policies is ex- 5 plored. Previous work on product recovery is extended using the introduction of a cap-and-trade mechanism in an infnite-horizon inventory system in which demand and returns are uncertain. Demand is met through two different sources namely manufacturing and remanufacturing, which differ in cost and greenhouse gas emissions. The main contributions of this paper are 1) comparison of system 10 operation in terms of cost and environmental performance under conventional and green inventory policies, and 2) managerial insights into the structure of green inventory policies. To illustrate the impact of a cap-and-trade scheme, a numerical example is used. We solved the problem as a Markov decision process, and characterized the inventory policies based on the optimal replen15 ishment strategy. We also conducted a sensitivity analysis to examine the effect of underlying environmental parameters such as the emission cap and the allowance price in the policy structures. The results indicate that decisions are sensitive to carbon prices. The inventory policy could play an important role in compliance with environmental legislation, although there is threshold carbon 20 price beyond which the company must focus on strategic decisions rather than tactical decisions.

Item Type: Peer reviewed article published in a journal
Professor:
Professor
Paquet, Marc
Chaabane, Amin
Affiliation: Génie de la production automatisée, Génie de la production automatisée
Date Deposited: 04 Jan 2017 17:14
Last Modified: 10 Oct 2018 17:41
URI: http://espace2.etsmtl.ca/id/eprint/14209

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