A sustainable supply chain coordination model with an investment in green technology and electric equipment

Abstract

This paper proposes a new mathematical model to examine a solution to a sustainable supply chain problem by investing in green production technology and electrical equipment for transportation and warehousing. This study integrated an inventory model involving a single vendor, a single distributor, and multiple retailers. The carbon emissions involving emissions from a vendor and retailers are incorporated in this paper. An algorithm solution is proposed to minimise the total cost to determine the optimal decision variables, i.e. the lot size, number of deliveries, safety factor, lead-time, and emissions. A numerical example is illustrated to validate the proposed model and provide insight into the relevant industry. The life cycle cost assessment of the electrical equipment is also discussed for managers to inform their decision-making. From the comparison results, the integrated scheme comprising electric-powered with green investment is lower than without green investment, fossil-fuel with green investment, and fossil fuel equipment only with a total cost saving of 0.68%, 3.28%, and 3.59%, respectively; lower-emissions of 39.69%, 42.22%, 27.46%, respectively; and lead-time reduction of 1.80%, 25.23%, 23.78%, respectively.