Inventory control under environmental considerations

Abstract

Sustainable development focuses on three axes: economic, social and environmental development. Since previous efforts were concentrated on cost reduction strategies, managers are now confronted with greater threats. They still have to supply the right quantities at the right moment at minimum cost while making environmental and societal improvements. In light of these new challenges, inventory control might offer an effective solution to integrate the sustainability issues. This work highlights the role of inventory control in achieving sustainable objectives. Our aim is to advance understanding of the potential of inventory control in the quest of building sustainable supply chains. In Chapter 1, we found that while the understanding of the effect of sustainable considerations at the strategic level is more mature, at the tactical level it is in its infancy. There is little or no knowledge about the role of inventory control in regard to sustainable development. Our aim is to contribute in filling the gaps. In Chapter 2, we explored how to incorporate environmental policies into inventory control. To this end, we studied an infinite horizon inventory problem with remanufacturing subject to carbon abatement regulations. We provided insights into the structure of new inventory and carbon management policies. Ultimately, we showed the economic and environmental advantages from restructured inventory policies. In Chapter 3, we extended our results to a finite horizon context. We addressed the effect of environmental parameters on production planning, and on inventory control decisions. The proposed model brought out the computational issues of the added complexities. A metaheuristic approach is then proposed. In Chapter 4, we investigated combining strategic and tactical planning. We stressed the financial and environmental benefits of such an integrated approach. Finally, we conclude this thesis with our general conclusion which brings together lessons learned and points out further perspectives. This thesis provides a comprehensive understanding of the benefits of inventory control to improve the sustainable performance of firms. Our findings enable us to place inventory control as a complementary approach to emission mitigation and cost control. Inventory policies must be redesigned to cope with environmental policies and to transform regulations into opportunities. Ultimately, this restructuring would 1) give more flexibility to the firm to respond to additional uncertainties from environmental issues, 2) balance production capacities, demand, and environmental requirements, and 3) release the potential of the carbon market to maximize the long-term profit while minimizing the environmental effects of production processes. Besides, our findings present multiple practical implications. Firstly, decision-makers can foresee threatening situations. Secondly, policy-makers can take advantage of our findings to define more appropriate enforcement levels. Finally, communities with carbon intensive businesses would benefit from a reduction in the environmental impact of manufacturing activities.

Date	22 Aug 2016
Original language	American English
Awarding Institution	École de technologie supérieure
Supervisor	Marc Paquet (Supervisor) & Amin Chaabane (Co-supervisor)