Page 65 - programme book

OR-006
An Inventory Model with Recovery and Periodic Delivery that Considers
Carbon Emission Cost

Yeo Heng Giap Ivan 1, a)

1 Department of Mathematical and Actuarial Sciences, Lee Kong Chian Faculty of
Engineering & Science, Universiti Tunku Abdul Rahman, Malaysia.

a) Corresponding author: yeohg@utar.edu.my

Abstract. This paper proposes an integrated inventory model that considers three types of inventories:
used items, service items, and raw materials. Used items are collected from the market and are restored
to a serviceable condition to satisfy demand. If the quantity of the restored items is lacking, then the
remaining demand is satisfied by converting raw materials into service items through a production run.
Demand is satisfied by shipping periodically in batches of equal size. The warehousing of items incurs
a carbon emission cost in addition to the traditional holding costs. Additionally, the transportation of
items to the client incurs a carbon emission cost as well. The objective of the model is to provide
insights to help determine both the frequency and the size of the batch shipments to minimize the
joint total inventory cost and carbon emission cost. This paper also proposes a numerical solution
procedure and provides a numerical example to illustrate the model. A numerical sensitivity analysis
is performed to derive insights that are potentially beneficial to policy-makers.

Keywords: inventory model, recovery, carbon emission