Effects of Preservation Technology Investment on Waste Generation in a Two-Echelon Supply Chain Model

Abstract

This study develops an integrated production-inventory model for a two-echelon supply chain network with controllable probabilistic deterioration. The investment in preservation technology is considered a decision variable to control the deteriorated quantity of an integrated system. The objective of the study is to optimize preservation investment, the number of shipments and shipment quantity, so that the total cost per unit of time of the supply chain is minimized. The study proposes a solution method, and the results show that investment in preservation technology reduces the total supply chain cost by 13%. Additionally, preservation increases the lot size, thus increasing the production cycle length, which reduces the ordering cost of the system. Furthermore, this study shows that preservation leads to a reduction of solid waste from deteriorated products. Total deteriorated products reduced to 8 units from 235 units, hence, preservation generates positive environmental benefits along with economic impacts. The robustness of the proposed model is illustrated with a numerical example, sensitivity analysis, and graphical representations. Moreover, comparative study and managerial insights are given to extract significant insights from the model.

Joint Inventory and Pricing Policy for an Online to Offline Closed-Loop Supply Chain Model with Random Defective Rate and Returnable Transport Items

“…Furthermore, the modeling approach of defective items needs to be explored further in the presences of shortage cots, lost sales and back ordering. Another important extension of this model is to consider deteriorated products, such as the study done by Ullah et al [63].…”

Pricing Decision within an Inventory Model for Complementary and Substitutable Products

“…Extra service facilities can be included within the study [45][46][47][48] for deteriorating products and non-zero random lead time. The quality improvement [49,50] and preservation technology [28,29] for deteriorating products can improve the study in a realistic way.…”

Dynamic Pricing in a Multi-Period Newsvendor Under Stochastic Price-Dependent Demand

“…Another limitation of this study was that we considered only the single discount per period, considering multiple discounts in one period is a more practical extension of this study. A third possible extension is to consider deteriorating products, such as the study done by Ullah et al [48]; in this case, the salvage value of the deteriorated product must be zero.…”